U.S. Stocks Seeing Further Upside After Early Advance
After moving mostly higher early in the session, stocks have seen further upside over the course of the trading day on Friday. With the upward move, the major averages are extending the advance seen during the previous session.
In recent trading, the major averages have reached new highs for the session. The Dow is up 291.68 points or 0.9 percent at 33,295.25, the Nasdaq is up 191.19 points or 1.7 percent at 11,654.18 and the S&P 500 is up 53.14 points or 1.3 percent at 4,034.49.
The strength on Wall Street comes as traders continue to pick up stocks at relatively reduced levels following recent weakness, as the gains posted by the Nasdaq and S&P 500 on Thursday came after they hit their lowest intraday levels in over a month.
A pullback by treasury yields has also generated some buying interest, with the yield on the benchmark ten-year note giving back ground after jumping to a three-month closing high above 4.0 percent.
Traders have also reacted positively to a report from the Institute for Supply Management showing a very slight slowdown in the pace of growth in U.S. service sector activity in the month of February.
The ISM said its services PMI edged down to 55.1 in February from 55.2 in January, although a reading above 50 still indicates growth in the sector. Economists had expected the index to slip to 54.5.
Andrew Hunter, Deputy Chief US Economist at Capital Economics, said the dip by the index “suggests activity continues to expand at a reasonably healthy pace, but provides further reason to doubt the idea that there has been a resurgence in growth since the start of the year.”
The report also showed the prices index fell to 65.6 in February from 67.8 in January, pointing to a slowdown in the pace of price growth.
“Overall, there isn’t much in the ISM services report to suggest the Fed needs to raise rates significantly higher than previously planned,” said Hunter.
Natural gas stocks have shown a strong move to the upside on the day, resulting in a 1.9 percent jump by the NYSE Arca Natural Gas Index.
The rally by natural gas stocks comes amid a spike by the price of the commodity, with natural gas for April delivery surging $0.218 or 7.9 percent to $2.98 per million BTUs.
Significant strength also remains visible among software stocks, as reflected by the 1.8 percent gain being posted by the Dow Jones U.S. Software Index.
Banking stocks are also turning in a strong performance on the day, driving the KBW Bank Index up by 1.6 percent. The index is bouncing off its lowest closing level in over a month.
Networking, airline and steel stocks are also seeing notable strength in afternoon trading, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index surged by 1.6 percent, while China’s Shanghai Composite Index rose by 0.5 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index closed just above the unchanged line, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index jumped by 1.6 percent.
In the bond market, treasuries are regaining ground after moving sharply lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 10 basis points at 3.973 percent.
Source: Read Full Article