WASHINGTON (dpa-AFX) - After recovering from an initial move to the downside, stocks have moved notably higher over the course of the trading day on Friday. The major averages have climbed well off their early lows and firmly into positive territory.
The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 385.42 points or 0.9 percent at 42,727.66, the Nasdaq is up 137.49 points or 0.7 percent at 19,510.26 and the S&P 500 is up 46.11 points or 0.8 percent at 5,913.19.
The strength that has emerged on Wall Street comes as traders react to the release of the Federal Reserve's preferred readings on consumer price inflation.
The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in November after rising by 0.2 percent in October. Economists had expected prices to increase by another 0.2 percent.
The annual rate of growth by the PCE price index accelerated to 2.4 percent in November from 2.3 percent in October, slightly slower than 2.5 percent jump economists had expected.
Excluding food and energy prices, the core PCE price index also edged up by 0.1 percent in November after climbing by 0.3 percent in October. Economists had expected core prices to rise by 0.2 percent.
The annual rate of growth by the core PCE price index in November came in at 2.8 percent, unchanged from October, while economists had expected an acceleration to 2.9 percent.
The slower than expected annual rates of growth have seemingly inspired traders to pick up stocks at relatively reduced levels following the mid-week sell-off.
Stocks plummeted on Wednesday after the Fed forecast fewer than previously estimated interest rate cuts next year amid lingering concerns about stick inflation.
'The market woke up in a terrible mood - an unexpected government shutdown and a more-hawkish-than-expected Fed are to blame - but this morning's inflation data came in lower-than-expected and took some of the edge off,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
Sector News
Gold stocks have moved sharply higher following recent weakness, driving the NYSE Arca Gold Bugs Index up by 2.3 percent. The index ended the previous session at its lowest closing level in over five months.
The rally by gold stocks comes amid a significant rebound by the price of the precious metal, with gold for February delivery surging $38.20 to $2,646.30 an ounce.
Interest rate-sensitive commercial real estate stocks have also shown a strong move back to the upside, as reflected by the 2.0 percent jump by the Dow Jones U.S. Real Estate Index.
Banking, computer hardware and semiconductor stocks are also seeing considerable strength after moving sharply lower over the past few sessions.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. China's Shanghai Composite Index edged down by 0.1 percent and Japan's Nikkei 225 Index dipped by 0.3 percent, while Australia's S&P/ASX 200 Index slumped by 1.2 percent.
Meanwhile, European stocks have climbed well off their worst levels but continue to see modest weakness. The German DAX Index is down by 0.5 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.2 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 6.4 basis points at 4.506 percent.
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