(RTTNews) – Stocks showed a significant turnaround over the course of the trading session on Friday, recovering from an early move to the downside to end the day mostly higher. The rebound on the day lifted the major averages to new record closing highs.
The major averages ended the day just off their highs of the session. The Dow rose 89.08 points or 0.3 percent to 35,819.56, the Nasdaq climbed 50.27 points or 0.3 percent to 15,498.39 and the S&P 500 edged up 8.96 points or 0.2 percent to 4,605.38.
For the week, the tech-heavy Nasdaq surged up by 2.7 percent, the S&P 500 jumped by 1.3 percent and the Dow rose by 0.4 percent.
A negative reaction to quarterly results from tech giants Apple (AAPL) and Amazon (AMZN) contributed to the early weakness on Wall Street.
Shares of Apple climbed off their worst levels but closed notably lower after the iPhone maker reported fiscal fourth quarter earnings that matched analyst estimates but weaker than expected sales amid supply chain issues.
Online retail giant Amazon also ended the day in negative territory after reporting much weaker than expected third quarter results.
Selling pressure waned over the course of the session, however, as traders seemed reluctant to make significant bets ahead of the Federal Reserve’s monetary policy meeting next week.
The Fed is likely to leave interest rates unchanged but could announce plans to begin scaling back its asset purchase program.
On the U.S. economic front, a report released by the Commerce Department showed personal income decreased by much more than expected in the month of September.
The Commerce Department said personal income slumped by 1.0 percent in September after inching up by 0.2 percent in August. Economists had expected personal income to edge down by 0.2 percent.
The bigger than expected drop in personal income primarily reflected a decrease in government social benefits, both in unemployment benefits and “other” benefits.
Meanwhile, the report showed personal spending climbed by 0.6 percent in September after jumping by an upwardly revised 1.0 percent in August.
Economists had expected personal spending to rise by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month.
A separate report from the University of Michigan showed consumer sentiment in the U.S. deteriorated by slightly less than initially estimated in the month of October.
The report said the consumer sentiment index for October was upwardly revised to 71.7 from the preliminary reading of 71.4.
While the upward revision surprised economists, who expected the index to be unrevised, the final reading was still below September’s 72.8.
Sector News
Despite the turnaround by the broader markets, substantial weakness remained visible among gold stocks, as reflected by the 2.9 percent nosedive by the NYSE Arca Gold Bugs Index.
The sell-off by gold stocks came amid a steep drop by the price of the precious metal, with gold for December delivery tumbling $18.70 to $1,783.90 an ounce.
Oil service stocks also saw considerable weakness despite an increase by the price of crude oil, resulting in a 2.9 percent slump by the Philadelphia Oil Service Index.
Natural gas, tobacco and computer hardware stocks also showed notable moves to the downside, while strength emerged among software and pharmaceutical stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index rose by 0.3 percent, while Hong Kong’s Hang Seng Index slid by 0.7 percent.
The major European markets also turned mixed over the course of the session. While the French CAC 40 Index climbed 0.4 percent, the German DAX Index edged down by 0.1 percent and the U.K.’s FTSE 100 Index dipped by 0.2 percent.
In the bond market, treasuries recovered from early weakness to end the day modestly higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.1 basis points to 1.557 percent after reaching a high of 1.619 percent.
Looking Ahead
The Fed announcement is likely to be in the spotlight next week, although traders are also likely to keep an eye on the monthly jobs report as well as reports on manufacturing and service sector activity.
Reaction to the latest earnings news may also continue to drive trading, with a slew of well-known companies due to report their quarterly results next week.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
