Stocks Close Mostly Higher On More Upbeat Earnings News - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading day on Friday, extending the upward trend seen throughout the past two weeks. The gains lifted the S&P 500 to a new record closing high, while the Nasdaq once again reached its best levels since 2000.

The major averages moved to the upside going into the close, ending the day firmly in positive territory. The Dow rose 61.07 points or 0.4 percent to 15,570.28, the Nasdaq climbed 14.40 points or .4 percent to 3,943.36 and the S&P 500 advanced 7.70 points or 0.4 percent to 1,759.77.

With the gains on the day, the major averages all moved higher for the week. The Dow jumped by 1.1 percent, while the Nasdaq and the S&P 500 climbed by 0.7 percent and 0.9 percent, respectively.

The strength on Wall Street was partly due to a positive reaction to the latest earnings reports, which have drawn increased attention since the end of the government shutdown.

Microsoft (MSFT) and Amazon (AMZN) posted standout gains after reporting their quarterly results, jumping by 6 percent and 9.4 percent, respectively.

Microsoft reported first quarter adjusted earnings of $0.63 per share, ahead of the $0.54 per share consensus estimate. Revenues rose 16 percent to $18.53 billion, exceeding the $17.79 billion consensus estimate.

Amazon reported a third quarter net loss of $0.09 per share on net sales of $17.09 billion, up 24 percent year-over-year. The loss was in line, while the revenues exceeded estimates.

On the economic front, the Commerce Department released a report showing that durable goods orders rose by much more than expected, although the growth was largely due to a jump in orders for transportation equipment.

The report said durable goods orders jumped 3.7 percent in September after inching up by a revised 0.2 percent in August.

Economists had expected orders to increase by about 2.5 percent compared to the 0.1 percent uptick originally reported for the previous month.

However, excluding the surge in orders for transportation equipment, durable goods orders edged down by 0.1 percent in September compared to a 0.4 percent drop in August.

A separate report from Thomson Reuters and the University of Michigan showed that consumer sentiment deteriorated by more than previously estimated in October, reflecting concerns about the impact of the government shutdown.

Sector News

With Microsoft helping to lead the way higher, considerable strength was visible in the software sector. The Dow Jones Software Index jumped 2.1 percent to its best closing level in over twelve years.

Along with Microsoft, CA Technologies (CA) and Symantec (SYMC) posted notable gains, advancing by 3.3 percent and 2.5 percent, respectively.

Significant strength also emerged among telecom stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Telecom Index.

Natural gas, commercial real estate and utilities stocks also saw notable strength on the day, while networking stocks came under considerable selling pressure.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 2.8 percent, while Hong Kong's Hang Seng Index ended the day down by 0.6 percent.

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

In the bond market, treasuries moved modestly higher after ending the previous session in the red. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 1.9 basis points to 2.503 percent.

Looking Ahead

Next week, the outcome of the Federal Reserve's monetary policy meeting is likely to be in focus. While the Fed is widely expected to maintain its asset purchase program in light of the government shutdown, traders will keep a close eye on any indications regarding future tapering.

Trading could also be impacted by the release of reports on retail sales, industrial production, national manufacturing activity, and consumer and producer prices.

On the earnings front, Merck (MRK), Pfizer (PFE), Sprint (S), Visa (V), and Exxon Mobil (XOM) are among the slew of companies due to report their quarterly results next week.