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U.S. Stocks Remain Mostly Positive After Early Rally

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After moving sharply higher early in the session, stocks have fluctuated over the course of the trading day on Friday but maintained a largely positive bias. With the gains on the day, the major averages are partly offsetting the pullback seen over the three previous sessions.

Currently, the major averages are all in positive territory but well off their highs of the session. The Dow is up 235.36 points or 0.8 percent at 28,729.56, the Nasdaq is up 41.73 points or 0.4 percent at 11,755.60 and the S&P 500 is up 17.11 points or 0.5 percent at 3,500.45.

The rebound on Wall Street comes as much better than expected retail sales data has partly offset recent concerns the economic recovery may be stalling.

A report from the Commerce Department said retail sales spiked by 1.9 percent in September after rising by 0.6 percent in August. Economists had expected retail sales to climb by 0.7 percent.

Excluding a jump in sales by motor vehicles and parts dealers, retail sales still surged up by 1.5 percent in September after climbing by a downwardly revised 0.5 percent in August.

Ex-auto sales were expected to rise by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4 percent in September after dipping by 0.3 percent in August.

Michael Pearce, Senior U.S. Economist at Capital Economics, said the strong retail sales growth "suggests the economy was carrying more momentum into the fourth quarter than anticipated, defying fears that the expiry of enhanced unemployment benefits in the summer would harm the economy."

Adding to the positive sentiment, the University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October.

The preliminary report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.

Meanwhile, traders have largely shrugged off a report from the Federal Reserve showing an unexpected decrease in industrial production in the month of September.

Buying interest was also generated after Pfizer (PFE) Chairman and CEO Albert Bourla said the drug giant will apply for emergency use of the Covid-19 vaccine it is developing with BioNTech (BNTX) soon after the safety milestone is achieved in the third week of November.

"All the data contained in our U.S. application would be reviewed not only by the FDA's own scientists but also by an external panel of independent experts at a publicly held meeting convened by the agency," Bourla said in an open letter.

The Dow is also benefiting from an advance by shares of Boeing (BA), which are moving sharply higher after Europe's top aviation regulator told Bloomberg he's satisfied changes made to the aerospace giant's 737 Max have made the aircraft safe to fly.

Sector News

Biotechnology stocks continue to see considerable strength in mid-day trading, resulting in a 1.3 percent advance by the NYSE Arca Biotechnology Index.

Significant strength also remains visible among healthcare and pharmaceutical stocks, with the Dow Jones U.S. Health Care Index and the NYSE Arca Pharmaceutical Index climbing by 1.2 percent and 1.1 percent, respectively.

Chemical, utilities and brokerage stocks are also seeing notable strength on the day, while oil service and transportation stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index fell by 0.4 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent.

Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index surged up 2 percent, the German DAX Index and the U.K.'s FTSE 100 Index jumped by 1.6 percent and 1.5 percent, respectively.

In the bond market, treasuries are seeing modest weakness after showing a lack of direction earlier in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1 basis point at 0.741 percent.

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