U.S. Stocks Close Higher On The Day But Lower For The Week

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Following the mixed performance seen in the previous session, the major U.S. stocks indexes all moved to the upside during trading on Friday. The Nasdaq and the S&P 500 extended the rebound seen on Thursday, while the Dow moved higher for the first time in four sessions.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow rose 179.08 points or 0.5 percent to 36,100.31, the Nasdaq jumped 156.68 points or 1 percent to 15,860.96 and the S&P 500 climbed 33.58 points or 0.7 percent to 4,682.85.

Despite the advance on the day, the major averages all moved lower for the week. The S&P 500 dipped by 0.3 percent, while the Dow and the Nasdaq slid by 0.6 percent and 0.7 percent, respectively.

The strength on Wall Street came as the concerns about inflation raised by the Labor Department's consumer price report seem to have been short-lived.

While the report showed consumer prices rose at their fastest annual rate in over thirty years in October, analysts have suggested the current wave of price spikes due to chronic worldwide supply constraints will not last long.

Federal Reserve officials have also repeatedly described the factors driving inflation as "transitory," indicating the central bank is not currently considering accelerating monetary policy tightening.

After ending Thursday's trading lower amid a steep drop by Disney (DIS), the Dow benefitted from an advance by shares of Johnson & Johnson (JNJ).

J&J rose by 1.2 percent after the healthcare giant announced plans to separate its consumer health business from its pharmaceutical and medical device operations.

Meanwhile, traders largely shrugged off report from the University of Michigan showing an unexpected deterioration in U.S. consumer sentiment in the month of November.

The preliminary report said the consumer sentiment index slid to 66.8 in November from a final reading of 71.7 in October. The decrease surprised economists, who had expected the index to inch up to 72.4.

With the unexpected drop, the consumer sentiment index fell to its lowest level since hitting 63.7 in November of 2011.

Surveys of Consumers chief economist Richard Curtin said the deterioration in consumer sentiment was due to "an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation."

Sector News

Tobacco stocks showed a substantial move to the upside on the day, driving the NYSE Arca Tobacco Index up by 2.4 percent.

Significant strength was also visible among housing stocks, as reflected by the 1.5 percent gain posted by the Philadelphia Housing Sector Index.

Software stocks also turned in a strong performance, resulting in a 1.5 percent advance by the Dow Jones U.S. Software Index.

Retail and networking stocks also saw considerable strength, while oil service stocks moved lower along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.1 percent, while China's Shanghai Composite Index edged up by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index fell by 0.5 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.2 basis points to 1.582 percent after hitting a low of 1.541 percent.

Looking Ahead

Next week's trading may be impacted by reaction to some key economic data, including reports on retail sales, industrial production, housing starts, and regional manufacturing activity.

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