U.S. Stocks Move Mostly Higher Following Early Volatility

After initially showing a lack of direction, stocks moved mostly higher over the course of the trading session on Friday. The major averages extended Thursday’s rally, with the Nasdaq reaching a seven-month closing high, while the Dow and the S&P 500 reached their best closing levels in over two months.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow climbed 272.00 points or 0.8 percent to 34,098.16, the Nasdaq rose 84.35 points or 0.7 percent to 12,226.58 and the S&P 500 advanced 34.13 points or 0.8 percent to 4,169.48.

For the week, the tech-heavy Nasdaq shot up by 1.2 percent, while the Dow and the S&P 500 both jumped by 0.9 percent.

The continued strength on Wall Street came following the release of a Commerce Department report that included readings on consumer price inflation that are said to be preferred by the Fed.

The report said the annual rate of consumer price growth slowed to 4.2 percent in March from a revised 5.1 percent in February.

Economists had expected the rate of growth to slow to 4.6 percent from the 5.0 percent originally reported for the previous month.

The annual rate of growth by core consumer prices, which exclude food and energy prices, also slipped to 4.6 percent in March from a revised 4.7 percent in February.

Economists had expected the rate of growth to slow to 4.5 percent from the 4.6 percent originally reported for the previous month.

Despite the slowdown, FHN Financial Chief Economist Chris Low noted, “Prices are still rising faster than the Fed is comfortable with.”

“The FOMC will hike another quarter-point next Wednesday, and may indicate further hikes remain a possibility,” Low said.

Ahead of the meeting, CME Group’s FedWatch Tool is indicating an 85.7 percent chance the Fed will raise rates by another 25 basis points.

Nonetheless, the inflation data helped offset a negative reaction to quarterly results from online retail giant Amazon (AMZN).

Amazon (AMZN) tumbled by 4.0 percent, as the company’s better than expected first quarter earnings and revenue were overshadowed by concerns about slowing growth for its Amazon Web Services cloud computing platform.

Shares of Snap (SNAP) also moved sharply lower after the Snapchat parent reported first quarter revenue that fell short of expectations.

On the other hand, shares of Intel (INTC) surged after the semiconductor giant reported a narrower than expected adjusted first quarter loss.

Sector News

Airline stocks moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 5.0 percent.

SkyWest (SKYW) helped lead the sector higher, skyrocketing by 17.6 percent after reporting a narrower than expected first quarter loss on revenues that exceeded analyst estimates.

The upbeat results from Intel also contributed to significant strength among semiconductor stocks, as reflected by the 1.8 percent gain posted by the Philadelphia Semiconductor Index.

Oil stocks also saw considerable strength among a sharp price by the price of crude oil, driving the NYSE Arca Oil Index up by 1.8 percent.

Networking, natural gas and computer hardware stocks also moved notably higher, reflecting broad based strength on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index surged by 1.4 percent, while China’s Shanghai Composite Index jumped by 1.1 percent.

The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.8 percent, the U.K.’s FTSE 100 Index climbed by 0.5 percent and the French CAC 40 Index edged up by 0.1 percent.

In the bond market, treasuries regained ground after moving notably lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.8 basis points at 3.450 percent.

Looking Ahead

Next week’s trading is likely to driven by reaction to the Federal Reserve’s monetary policy announcement on Wednesday.

The latest earnings news is also likely to attract attention along with the monthly jobs report as well as reports on manufacturing and service sector activity.

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