Stocks Move Mostly Higher Amid Light Trading Activity - U.S. Commentary

(RTTNews) - While trading activity was somewhat subdued, stocks moved mostly higher over the course of the trading day on Friday. The upward move on the day came on the heels of the lackluster performance that was seen in the previous session.

The major averages pulled back off their best levels going into the close but remained in positive territory. The Dow climbed 69.15 points or 0.4 percent to 17,477.40, the Nasdaq edged up 14.68 points or 0.3 percent to 5,048.24 and the S&P 500 rose by 8.15 points or 0.4 percent to 2,091.54.

With the gains on the day, the major averages all moved higher for the week. While the Nasdaq inched up just 0.1 percent, the Dow and the S&P 500 advanced by 0.6 percent and 0.7 percent, respectively.

The strength on Wall Street partly reflected a positive reaction to some key U.S. economic data, including a report from the Federal Reserve showing a bigger than expected increase in industrial production.

The report said industrial production climbed by 0.6 percent in July after inching up by 0.1 percent in June. Economists had expected production to increase by about 0.4 percent.

The bigger than expected increase in production reflected a rebound in manufacturing output, which the Fed attributed to an increase in production of motor vehicle assemblies.

Chris Low, chief economist at FTN Financial, said, "Consumers are still spending money, carrying manufacturing through a difficult environment marked by sluggish exports and cautious business investment."

"This report is likely to be welcomed by the Fed point as further evidence of a manufacturing recovery from the blow dealt by last year's sharp rise in the dollar," he added.

A separate report from the Labor Department showed that producer prices rose by slightly more than expected in July amid a notable increase in service prices.

Traders seemed somewhat reluctant to make significant moves, however, with uncertainty about the situations in China and Greece weighing on their minds.

Sector News

Telecom stocks showed a strong move to the upside on the day, driving the NYSE Arca North American Telecom Index up by 1.4 percent. With the gain, the index ended the session at its best closing level in well over a month.

Sprint (S) helped to lead the telecom sector higher, with the wireless service provider surging up by 7.7 percent to a one-month closing high.

Considerable strength also emerged among brokerage stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Broker/Dealer Index. The gain by the index came after it ended the previous session at its worst closing level in over four months.

Tobacco, steel, and software stocks also saw some strength on the day, while weakness among oil service and gold stocks limited the upside for the broader markets.

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 fell by 0.4 percent, while China's Shanghai Composite Index rose by 0.3 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index dropped by 0.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index both fell by 0.3 percent.

In the bond market, treasuries showed a lack of direction for much of the day before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.196 percent.

Looking Ahead

Economic data is likely to attract attention next week, with several key housing reports due to be released along with a report on consumer price inflation.

Trading could also be impacted by earnings news from some big-name retailers such as Wal-Mart (WMT), Home Depot (HD), Lowe's (LOW), and Target (TGT).