Stocks Close Mostly Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - After moving notably higher in early trading on Friday, stocks gave back some ground as the day progressed but remained mostly positive. With the higher close, the major averages added to the strong gains posted on Monday and Wednesday.

The major averages ended the day firmly in positive territory but well off their best levels of the day. The Dow climbed 91.06 points or 0.5 percent to 17,823.81, the Nasdaq advanced 31.28 points or 0.6 percent to 5,104.92 and the S&P 500 rose 7.93 points or 0.4 percent to 2,089.17.

For the week, the major averages all moved notably higher, nearly offsetting the sharp pullback seen last week. The Nasdaq surged up by 3.6 percent, while the Dow and the S&P 500 jumped by 3.4 percent and 3.3 percent, respectively.

Early buying interest was generated by strength in emerging markets as well as more dovish comments from European Central Bank President Mario Draghi.

In remarks to the Frankfurt European Banking Congress, Draghi pledged the ECB would do what it must to raise inflation as quickly as possible.

"At the December Governing Council meeting we will thoroughly assess the strength and persistence of the factors that are slowing the return of inflation towards 2 percent," Draghi said.

He added, "If we conclude that the balance of risks to our medium-term price stability objective is skewed to the downside, we will act by using all the instruments available within our mandate."

Draghi's remarks were seen as a sign that the ECB may ramp up its asset purchase program following its meeting next month.

The stimulatory stances of the world's central banks have been lending support to the markets, with even the Federal Reserve expected to make only a token interest rate hike when it finally begins to normalize.

Amid a relatively quiet day on the U.S. economic front, traders also kept an eye on speeches by a pair of Fed officials.

In remarks at an event in Fort Smith, Arkansas, St. Louis Fed President James Bullard repeated a speech he delivered at a separate event earlier this month.

Bullard noted the market-based probabilities of a near-term end to the zero interest rate policy have increased but stressed any decision will be data dependent.

Additionally, New York Fed President William Dudley spoke at Hofstra University on Long Island, telling students the U.S. economy is in pretty good shape.

Dudley said the Fed hopes to soon become reasonably confident that inflation will return to the 2 percent inflation target.

The New York Fed Chief also stressed that the decision on interest rates would be data dependent, noting that there will be four weeks of data before the next monetary policy meeting.

Sector News

Airline stocks saw significant strength on the day, resulting in a 1.3 percent gain by the NYSE Arca Airline Index. With the gain, the index climbed further off the one-month closing low it set on Tuesday.

Mexican airline Volaris (VLRS) helped to lead the sector higher, climbing by 4,7 percent. Brazil's Gol (GOL) and Avianca Holdings (AVH) also posted strong gains.

Considerable strength was also visible among commercial real estate stocks, as reflected by the 1.2 percent gain posted by the Morgan Stanley REIT Index.

Retail, telecom, and internet stocks also saw notable strength on the day, although buying interest was somewhat subdued.

On the other hand, gold stocks showed a substantial move to the downside, dragging the NYSE Arca Gold Bugs Index down by 4 percent. The weakness in the sector came as gold for December delivery dipped $1.60 to $1,076.30 an ounce.

Weakness was also visible among natural gas stocks, which moved lower as natural gas for December delivery slid $0.131 to $2.145 per million BTUs.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index jumped by 1.1 percent.

Meanwhile, the major European markets ended the day mixed. While the French CAC 40 Index edged down by 0.1 percent, the U.K.'s FTSE 100 Index crept up by 0.1 percent and the German DAX Index rose by 0.3 percent.

In the bond market, treasuries moved modestly 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, inched up by 1.4 basis points to 2.262 percent.

Looking Ahead

While the markets will be closed next Thursday for Thanksgiving, traders will be presented with a slew of U.S. economic data in the days leading up to the holiday.

Traders are likely to pay close attention to reports on new and existing home sales, durable goods orders, and personal income and spending.