Stocks Extend Upward Trend Following GE News - U.S. Commentary

(RTTNews) - Despite a lack of significant catalysts, stocks moved mostly higher over the course of the trading day on Friday. With the upward move on the day, the major averages added to the gains posted in the two previous sessions.

The major averages ended the day firmly in positive territory, just off their highs for the session. The Dow advanced 98.92 points or 0.6 percent to 18,057.65, the Nasdaq rose 21.41 points or 0.4 percent to 4,995.98 and the S&P 500 climbed 10.88 points or 0.5 percent to 2,102.06.

For the week, the major averages all posted notable gains. The Nasdaq surged up by 2.2 percent, while the Dow and the S&P 500 both jumped by 1.7 percent.

The strength on Wall Street extended a recent upward trend by stocks, with the Dow climbing back above the psychologically important 18,000 level.

Nonetheless, the Dow and the S&P 500 currently remain well off the record closing highs that were set in the early part of March.

Positive sentiment was generated in reaction to news of General Electric's (GE) restructuring of GE Capital, with the diversified conglomerate jumping by 10.8 percent to its best closing level in well over six years.

The rally by GE came after the company announced plans to reduce the size of its financial businesses and sell most assets of GE Capital for about $26.5 billion. The company also announced a $50 billion stock repurchase program.

Overall trading activity was somewhat subdued, however, with some traders staying on the sidelines as they wait for earnings season to pick up steam next week.

JP Morgan (JPM), Intel (INTC), Bank of America (BAC), Wells Fargo (WFC), Netflix (NFLX), Goldman Sachs (GS), American Express (AXP), and GE are among the big-name companies due to release their quarterly results in the coming days.

On the economic front, the Labor Department released a report before the start of trading showing a pullback in U.S. import prices in the month of March.

The Labor Department said import prices dipped by 0.3 percent in March after edging up by a revised 0.2 percent in February. The pullback in prices matched economist estimates.

Meanwhile, the report also said export prices inched up by 0.1 percent in March following a revised 0.2 percent drop in the previous month. Economists had expected export prices to slip by 0.2 percent.

Sector News

After moving notably lower over the past few sessions, gold stocks showed a substantial move back to the upside on the day. Reflecting the strength in the sector, the NYSE Arca Gold Bugs Index surged up by 2.9 percent.

The strength among gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $11 to $1,204.60 an ounce.

Significant strength also emerged among biotechnology stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Biotechnology Index. Alexion (ALXN), Vertex (VRTX), and Immunogen (IMGN) posted standout gains.

Trucking, electronic storage, pharmaceutical, and railroad stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index edged down by 0.2 percent, while Hong Kong's Hang Seng Index surged up by 1.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index rose by 0.6 percent, the U.K.'s FTSE 100 Index jumped by 1.1 percent and the German DAX Index soared by 1.7 percent.

In the bond market, treasuries closed slightly higher after failing to sustain an early upward move. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by less than a basis point to 1.951 percent.

Looking Ahead

As mentioned above, earnings news is likely to move into the spotlight next week, although many analysts expect the results to be weak.

Economic data may also attract some attention, with traders likely to keep a close eye on reports on retail sales, industrial production, housing starts, and producer and consumer price inflation.