U.S. Stocks Climb More Firmly Into Positive Territory After Early Uptick

After moving modestly 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 have further offset the pullback seen earlier in the week.

Currently, the major averages are off their best levels of the day but still firmly in positive territory. The Dow is up 138.87 points or 0.4 percent at 36,060.10, the Nasdaq is up 130.12 points or 0.8 percent at 15,834.40 and the S&P 500 is up 28.64 points or 0.6 percent at 4,677.91.

The strength on Wall Street comes as the concerns about inflation raised by the Labor Department’s consumer price report seem to have been short-lived.

While the report showed consumer prices rose at their fastest annual rate in over thirty years in October, analysts have suggested the current wave of price spikes due to chronic worldwide supply constraints will not last long.

Federal Reserve officials have also repeatedly described the factors driving inflation as “transitory,” indicating the central bank is not currently considering accelerating monetary policy tightening.

After ending Thursday’s trading lower amid a steep drop by Disney (DIS), the Dow is also benefiting from an advance by shares of Johnson & Johnson (JNJ).

J&J is up by 1.7 percent after the healthcare giant announced plans to separate its consumer health business from its pharmaceutical and medical device operations.

Meanwhile, traders have largely shrugged off report from the University of Michigan showing an unexpected deterioration in U.S. consumer sentiment in the month of November.

The preliminary report said the consumer sentiment index slid to 66.8 in November from a final reading of 71.7 in October. The decrease surprised economists, who had expected the index to inch up to 72.4.

With the unexpected drop, the consumer sentiment index fell to its lowest level since hitting 63.7 in November of 2011.

Surveys of Consumers chief economist Richard Curtin said the deterioration in consumer sentiment was due to “an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”

Sector News

Housing stocks have shown a significant move to the upside over the course of the session, driving the Philadelphia Housing Sector Index up by 1.5 percent.

Considerable strength has also emerged among retail stocks, as reflected by the 1.4 percent gain being posted by the Dow Jones U.S. Retail Index.

Tobacco stocks also continue to turn in a strong performance in afternoon trading, with the NYSE Arca Tobacco Index climbing by 1.4 percent.

Software, networking and semiconductor stocks have also moved higher on the day, while oil service stocks have moved lower along with the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index jumped by 1.1 percent, while China’s Shanghai Composite Index edged up by 0.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.5 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries have turned 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, is up by 1.8 basis points at 1.578 percent.

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