Bargain Hunting Contributes To Notable Rebound On Wall Street - U.S. Commentary

(RTTNews) - After moving moderately higher in early trading on Friday, stocks accelerated to the upside in the afternoon before closing sharply higher. The strong gains on the day partly offset the substantial pullback that was seen in the previous session.

The major averages gave back some ground going into the close but remained firmly positive. The Dow jumped 167.35 points or 1 percent to 17,113.15, the Nasdaq surged up 45.45 points or 1 percent to 4,512.19 and the S&P 500 advanced 16.86 points or 0.9 percent to 1,982.85.

Despite the gains on the day, the major averages all moved notably lower for the week. The Dow slumped by 1 percent, while the S&P 500 and the Nasdaq tumbled by 1.4 percent and 1.5 percent, respectively.

The rebound on Wall Street was partly due to bargain hunting following yesterday's sell-off, which pulled all three major averages down to their lowest closing levels in over a month.

Traders also reacted positively to a report from the Commerce Department showing that U.S. gross domestic product grew faster than previously estimated in the second quarter.

The Commerce Department said GDP increased by 4.6 percent in the second quarter compared to the previously reported 4.2 percent growth.

The upwardly revised growth, which matched economists' consensus estimate, reflects a notable turnaround from the 2.1 percent contraction seen in the first quarter.

With the upward revision, the GDP growth in the second quarter reflected the biggest jump since a matching increase in the fourth quarter of 2011.

Thomson Reuters and the University of Michigan also released a report showing an unrevised improvement in consumer sentiment in the month of September.

Among individual stocks, shares of Janus Capital (JNS) moved sharply higher on the day on news that bond guru Bill Gross has left his post as chief investment officer at Pimco to join the investment firm.

Athletic apparel giant Nike (NKE) also turned in a strong performance after reporting first quarter earnings and revenues that exceeded analyst estimates.

On the other hand, shares of Finish Line (FINL) came under pressure after the athletic apparel retailer reported weaker than expected second quarter results.

Sector News

After trending lower over the past two weeks, electronic storage stocks showed a strong move back to the upside on the day. The NYSE Arca Disk Drive Index advanced by 1.8 percent after ending the previous session at its lowest closing level in over a month.

SanDisk (SNDK) helped to lead the storage sector higher, with the flash memory cards maker surging up by 2.3 percent.

Considerable strength was also visible among trucking stocks, as reflected by the 1.6 percent gain posted by the Dow Jones Trucking Index. The index bounced well of the more than one-month closing low set on Thursday.

Oil service stocks also turned in a strong performance, moving higher along with the price of crude oil. With crude for November delivery jumping $1.01 to $93.54 a barrel, the Philadelphia Oil Service Index rose by 1.5 percent.

Defense, railroad, and semiconductor stocks also saw notable strength on the day, while gold stocks bucked the uptrend amid a decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. Japan's Nikkei 225 Index dropped by 0.9 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent. Meanwhile, China's Shanghai Composite Index bucked the downtrend and inched up by 0.1 percent.

The major European markets turned in a mixed performance on the day. While the German DAX Index edged down by 0.2 percent, the U.K.' FTSE 100 Index crept up by 0.2 percent and the French CAC 40 Index jumped by 0.9 percent.

In the bond market, treasuries gave back some ground after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 2.535 percent.

Looking Ahead

A slew of economic data is scheduled to be released next week, although traders are likely to be focused on the monthly employment report due next Friday.

Ahead of the release of the jobs data, trading could be impacted by reports on personal income and spending, pending home sales, and national manufacturing activity.