U.S. Stocks Move Sharply Higher, Dow Reaches Two-Month Closing High

Following the mixed performance seen in Thursday’s session, stocks moved sharply higher over the course of the trading day on Friday. The major averages all showed strong moves to the upside, with the Dow reaching a two-month closing high.

The major averages reached new highs going into the close of trading. The Dow surged 828.52 points or 2.6 percent to 32,861.80, the Nasdaq shot up 309.78 points or 2.9 percent to 11,102.45 and the S&P 500 jumped 93.76 points or 2.5 percent to 3,901.06.

For the week, the Dow skyrocketed by 5.7 percent, the S&P 500 spiked by 4.0 percent and the Nasdaq rallied by 2.2 percent.

The rally on Wall Street came despite a steep drop by shares of Amazon (AMZN), with the online retail giant plunging by 9.7 percent.

Amazon has came under pressure after reporting mixed third quarter results and providing disappointing fourth quarter revenue guidance.

Traders reacted more positively to other earnings news, with semiconductor giant Intel (INTC) soaring despite lowering its full-year guidance. Intel reported third quarter results that beat analyst estimates.

Shares of Apple (AAPL) also moved sharply higher after the tech giant reported better than expected fiscal fourth quarter earnings but forecast slower revenue growth in the current quarter.

Energy giant Exxon Mobil (XOM) also moved to the upside after reporting record profits in the third quarter due to higher energy prices.

Buying interest may also have been generated in reaction to a Commerce Department report showing core consumer price growth accelerated by slightly less than expected in September.

The Commerce Department said the annual rate of core consumer price growth accelerated to 5.1 percent in September from 4.9 percent in August.

Economists had expected the annual rate of growth in core consumer prices, which exclude food and energy prices, to accelerate to 5.2 percent.

Sector News

With Intel helping to lead the way higher, semiconductor stocks showed a substantial move to the upside, driving the Philadelphia Semiconductor Index up by 4.0 percent.

Telecom stocks also turned in a particularly strong performance on the day, with the NYSE Arca North American Telecom Index surging by 3.7 percent to its best closing level in a month.

Wireless network operator T-Mobile (TMUS) posted a standout gain after reporting strong third quarter subscriber growth and raising its full-year guidance.

Considerable strength was also visible among networking stocks, as reflected by the 2.9 percent jump by the NYSE Arca Networking Index.

Biotechnology, utilities and housing stocks also saw significant strength, while steel and oil service stocks showed notable moves to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slid by 0.9 percent, while China’s Shanghai Composite Index tumbled by 2.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the German DAX Index inched up by 0.2 percent and the French CAC 40 Index rose by 0.5 percent.

In the bond market, treasuries gave back ground after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.3 basis points to 4.010 percent.

Looking Ahead

The Federal Reserve’s monetary policy decision is likely to be in the spotlight next week, overshadowing reports on manufacturing and service sector activity, labor productivity and factory orders.

Traders are likely to keep a close eye on the Fed’s statement, looking for signs the central bank is considering slowing the pace of interest rate hikes.

Following the Fed announcement next Wednesday, the focus is likely to shift to the Labor Department’s monthly jobs report due next Friday.

Earnings news will also continue to attract attention, with a slew of well known companies scheduled to release their quarterly results next week.

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