Plus   Neg

Bargain Hunting Contributes To Higher Close On Wall Street - U.S. Commentary


Stocks fluctuated over the course of the trading session on Friday but managed to end the day significantly higher. With the higher close on the day, the major averages regained some ground following a two-day sell-off.

The major averages all closed in positive territory, although the tech-heavy Nasdaq outperformed its counterparts. While the Nasdaq soared 167.83 points or 2.3 percent to 7,496.89, the Dow jumped 287.16 points or 1.2 percent to 25,339.99 and the S&P 500 surged up 38.76 points or 1.4 percent to 2,767.13.

Despite the rebound on the day, the major averages all moved sharply lower for the week. The Nasdaq tumbled by 3.7 percent, while the S&P 500 and the Dow plunged by 4.1 percent and 4.2 percent, respectively.

Bargain hunting contributed to the higher close on Wall Street, with the major averages bouncing off the multi-month closing lows set on Thursday.

The substantial rebound by stocks also came as strong Chinese trade data helped eased concerns over slowing global growth.

Figures from China's customs administration showed Chinese exports logged double-digit annual growth in September despite escalating trade tensions with the U.S.

Additionally, top White House economic adviser Larry Kudlow told reporters a meeting between President Donald Trump and Chinese President Xi Jinping at a multilateral summit in November is "under discussion."

On the U.S. economic front, the Labor Department released a report showing a much bigger than expected increase in U.S. import prices in the month of September.

The Labor Department said import prices climbed by 0.5 percent in September after falling by a revised 0.4 percent in August. Economists had expected import prices to rise by 0.2 percent.

Meanwhile, the report said export prices came in unchanged in September after slipping by a revised 0.2 percent in August. Export prices had also been expected to increase by 0.2 percent.

A separate report from the University of Michigan unexpected showed a modest decrease in consumer sentiment in the month of October.

The preliminary report showed the consumer sentiment index dipped to 99.0 in October from the final September reading of 100.1. The drop surprised economists, who had expected the index to inch up to 100.4.

Sector News

Retail stocks showed a significant move to the upside on the day, driving the Dow Jones Retail Index up by 2.8 percent. The index rebounded after ending Thursday's trading at a three-month closing low.

Online retail giant Amazon (AMZN) posted a standout gain, surging up 4 percent from the three-month closing low set in the previous session.

Computer hardware, biotechnology, and semiconductor stocks also saw considerable strength, contributing to the jump by the tech-heavy Nasdaq.

Steel and healthcare stocks also moved notably higher on the day, while some weakness was visible among housing and banking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region rebounded on Friday following recent weakness. Japan's Nikkei 225 Index rose by 0.5 percent, while Hong Kong's Hang Seng Index surged up by 2.1 percent.

Meanwhile, the major European markets turned lower over the course of the session. While the German DAX Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both dipped by 0.2 percent.

In the bond market, treasuries recovered from early weakness but still ended the day slightly lower. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 3.141 percent.

Looking Ahead

Earnings season will start to pick up steam next week, with Bank of America (BAC), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), IBM Corp. (IBM), Netflix (NFLX), American Express (AXP), and Procter & Gamble (PG) among the companies due to report their quarterly results.

Reaction to reports on retail sales, industrial production, housing starts, and existing home sales may also impact trading next week.

Traders are also likely to keep an eye on the release of the minutes of the Federal Reserve's latest monetary policy meeting, which may shed additional light on the outlook for interest rates.

For comments and feedback contact: editorial@rttnews.com

Follow RTT