Stocks Manage To End Choppy Trading Day Modestly Higher - U.S. Commentary

(RTTNews) - After showing a lack of direction throughout much of the trading session on Friday, stocks managed to end the day mostly higher. With the upward move, the markets extended the recovery from the sell-off seen in early trading on Thursday.

The major averages closed modestly higher, near their best levels of the day. The Dow rose 28.74 points or 0.2 percent to 16,943.81, the Nasdaq climbed 19.29 points or 0.4 percent to 4,415.49 and the S&P 500 edged up 2.89 points or 0.2 percent to 1,967.57.

Despite the gains on the day, the major averages all moved lower for the week. The Nasdaq tumbled by 1.6 percent, while the Dow and the S&P 500 dropped by 0.7 percent and 0.9 percent, respectively.

The strength seen at the close of trading may have partly reflected bargain hunting following the notable pullback seen earlier this week.

Nonetheless, traders largely seemed reluctant to make any significant moves ahead of the release of a slew of earnings news next week.

Citigroup (C), Goldman Sachs (GS), JP Morgan (JPM), Intel (INTC), Bank of America (BAC), IBM (IBM), Morgan Stanley (MS), and General Electric (GE) are among the big-name companies due to report their quarterly results next week.

Meanwhile, traders largely shrugged off the release of quarterly results from Wells Fargo (WFC), the first major U.S. bank to report its quarterly results this earnings season.

Before the start of trading, Wells Fargo reported second quarter earnings that rose to $1.01 per share from $0.98 per share in the year-ago quarter, matching analyst estimates.

The financial giant also said total revenue for the quarter dipped to $21.07 billion from $21.38 billion but exceeded estimates for $20.82 billion.

Among individual stocks, cigarette maker Lorillard (LO) turned in a strong performance after confirming that it is in talks regarding a potential acquisition by Reynolds American (RAI).

Shares of Whirlpool (WHR) also moved to the upside on the day after the appliance maker announced a deal to acquire a majority interest in Indesit for a total purchase price of 758 million euros.

On the other hand, Rent-A-Center (RCII) ended the day sharply lower after the chain of rent-to-own stores forecast second quarter earnings below analyst estimates.

Sector News

Despite the strength shown by the broader markets at the close, most of the major sectors ended the day showing only modest moves.

Gold stocks saw considerable strength on the day, however, with the NYSE Arca Gold Bugs Index jumping by 2.4 percent. The index offset the steep loss posted in the previous session to reach a nearly four-month closing high.

The rebound by gold stocks came despite a modest decrease by the price of the precious metal, as gold for August delivery slid $1.80 to $1,337.40 an ounce.

Biotechnology, internet, and airline stocks also saw notable strength on the day, while significant weakness was visible among natural gas stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index rose by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index inched up by 0.1 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index advanced by 0.3 percent and 0.4 percent, respectively.

In the bond market, treasuries moved modestly higher, extending the upward move seen throughout the week. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.2 basis points to 2.52 percent.

Looking Ahead

While the earnings news is likely to attract headlines next week, traders are also likely to keep an eye on several key economic reports as well as Congressional testimony by Federal Reserve Chair Janet Yellen.

Trading could be impacted by reaction to reports on retail sales, producer price inflation, industrial production, housing starts, and regional manufacturing activity.