Stocks Regaining Ground Following Yesterday's Sell-Off - U.S. Commentary

(RTTNews) - Reflecting renewed risk appetite, stocks have moved mostly higher in early trading on Friday following the sell-off seen in the previous session. The major averages have climbed firmly into positive territory, partly offsetting yesterday's steep losses.

Currently, the major averages are off their highs for the young session but holding on to notable gains. The Dow is up 129.88 points or 0.7 percent at 17,671.84, the Nasdaq is up 32.82 points or 0.7 percent at 4,881.19 and the S&P 500 is up 16.20 points or 0.8 percent at 2,058.11.

The early strength on Wall Street comes as traders seem more comfortable making risky bets, shrugging off the global economic concerns that contributed to the weakness seen in the previous session.

Federal Reserve Chair Janet Yellen added to the positive sentiment with remarks during a panel discussion with former Fed chairs Ben Bernanke, Alan Greenspan and Paul Volcker on Thursday.

Yellen described the "tremendous progress" that the U.S. economy has made since the financial crisis and shrugged off concerns about an economic bubble.

The current Fed Chief noted that the central bank would still watch the economy very carefully as it makes future decisions about interest rates.

Yellen's comments have been cited as a reason for declines by safe haven currencies like the Japanese yen, reflecting the return of risk appetite.

The U.S. dollar is trading at 108.62 yen compared to the 108.21 yen it fetched at the close of New York trading on Thursday.

In separate remarks on Friday, New York Fed President William Dudley said he believes a cautious and gradual approach to policy normalization is appropriate.

Dudley said downside risks have diminished since earlier this year but noted there continues to be significant uncertainty about how economic growth prospects abroad will affect the U.S. economic outlook.

Early buying interest on Wall Street has also been generated by a substantial rebound by the price of crude oil.

Crude oil for May delivery is currently surging up $2.35 to $39.61 a barrel after sliding $0.49 to $37.26 a barrel in the previous session.

The rebound by the price of crude oil comes as Russian Energy Minister Alexander Novak said he hopes oil producing nations will agree to an output freeze at a meeting later this month.

Reflecting the sharp increase by the price of crude oil, energy stocks are seeing significant strength in early trading.

The Philadelphia Oil Service Index has surged up by 4.3 percent, the NYSE Arca Natural Gas Index has jumped by 3.7 percent and the NYSE Arca Oil & Gas Index has advanced by 2.8 percent.

Steel, gold, transportation, and banking stocks are also seeing early strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. Japan's Nikkei 225 Index climbed by 0.5 percent, while China's Shanghai Composite Index dropped by 0.8 percent.

Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the French CAC 40 Index has surged up by 1.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index have both jumped by 1.2 percent.

In the bond market, treasuries are giving back ground after ending the previous session notably higher. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.6 basis points at 1.727 percent.