Stocks Extend Recent Upward Trend On 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 in recent sessions. The gains on the day lifted the S&P 500 to another new record closing high, while the Nasdaq set a new thirteen-year high.

The major averages all ended the day in positive territory, although the Dow underperformed its counterparts. While the Dow edged up 28.00 points or 0.2 percent to 15,399.65, the Nasdaq jumped 51.13 points or 1.3 percent to 3,914.28 and the S&P 500 advanced 11.35 points or 0.7 percent to 1,744.50.

With the gains on the day, the major averages all moved notably higher for the week. The Nasdaq soared by 3.2 percent, the S&P 500 surged up by 2.4 percent and the Dow rose by 1.1 percent.

The strength on Wall Street came as the resolution of the latest fiscal crisis in Washington allowed traders to pay more attention to the earnings news from big-name companies.

Shares of Google (GOOG) moved sharply higher on the day after the tech giant reported better than expected third quarter results. Google jumped 13.8 percent, closing at a record high above $1,000 a share.

General Electric (GE) and Morgan Stanley (MS) also posted strong gains after reporting third quarter earnings that beat analyst estimates.

Traders also continued to express relief after lawmakers reached an agreement to reopen the government and raise the debt ceiling.

While the temporary nature of the extension could lead to another protracted fight in a few months, the markets are currently enjoying the brief respite.

Positive sentiment was also generated by a report from the Chinese National Bureau of Statistics showing that Chinese GDP saw a faster rate of growth in the third quarter.

The report said China's third quarter GDP rose 7.8 percent year-over-year, in line with estimates and faster than the 7.5 percent growth in the second quarter.

Sector News

With Google helping to lead the way higher, considerable strength was visible among internet stocks. The NYSE Arca Internet Index surged up by 2.8 percent to its best closing level since 2000.

Baidu (BIDU) and Amazon (AMZN) posted strong gains along with Google, advancing by 7.9 percent and 5.8 percent, respectively.

Oil service stocks also moved sharply higher on the day, driving the Philadelphia Oil Service Index up by 1.9 percent to a two-year closing high. Within the sector, Baker Hughes (BHI) jumped 7.3 percent after reporting better than expected third quarter results.

Significant strength also emerged among railroad stocks, as reflected by the 1.3 percent gain posted by the Dow Jones Railroads Index.

Computer hardware stocks also saw notable strength, while health insurance stocks extended the downward move seen in the previous session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index bucked the uptrend and dipped by 0.2 percent. Hong Kong's Hang Seng Index jumped by 1.1 percent, while Australia's All Ordinaries Index advanced by 0.7 percent.

The major European markets also moved to the upside on the day. While the French CAC 40 Index climbed by 1.1 percent, the U.K.'s FTSE 100 Index and the German DAX Index rose by 0.7 percent and 0.6 percent, respectively.

In the bond market, treasuries showed a lack of direction throughout the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day up by less than a basis point at 2.589 percent.

Looking Ahead

Next week, traders are likely to keep a close eye on the release of the September jobs report. The report is due to be released on Tuesday after the government shutdown postponed the report earlier this month.

Reports on existing home sales, import and export prices, and consumer sentiment may also attract some attention as the market focus shifts away from Washington.

On the earnings front, Dow components McDonald's (MCD), DuPont (DD), Travelers (TRV), United Technologies (UTX), Boeing (BA), Caterpillar (CAT), 3M (MMM), Microsoft (MSFT), and Procter & Gamble (PG) are among the companies due to report their quarterly results next week.