Stocks Ride Upward Momentum To Mostly Higher Close - U.S. Commentary

(RTTNews) - Benefiting from the recent upward momentum on Wall Street, stocks moved mostly higher over the course of the trading day on Friday.

The major averages all ended the day in positive territory, although the Nasdaq posted only a modest gain. While the Nasdaq edged up 3.35 points or 0.1 percent to 4,244.03, the Dow advanced 126.80 points or 0.8 percent to 16,154.39 and the S&P 500 climbed 8.80 points or 0.5 percent to 1,838.63.

For the week, the major averages all posted notable gains. The Nasdaq jumped by 2.9 percent, while the Dow and the S&P 500 both surged up by 2.3 percent.

The strength that emerged on Wall Street on Friday extended the upward trend seen over the past few sessions, which has helped the markets to recover from the sell-off seen in late January.

While the Dow remains well off its record highs, the Nasdaq managed to end the session at a new thirteen-year closing high.

Traders once again shrugged off a disappointing economic report amid indications that the data was distorted by the severe winter weather.

Before the start of trading, the Federal Reserve released a report showing an unexpected drop in industrial production, although the central bank noted that the weather curtailed manufacturing production in some regions of the country.

The report said industrial production fell by 0.3 percent in January after rising by 0.3 percent in December. The pullback came as a surprise to economists, who had expected production to increase by another 0.3 percent.

"Industrial production usually bounces back after a period of bad weather, as postponed orders are completed," said Paul Dales, Senior U.S. Economist at Capital Economics. "With the weather having been just as severe in February, however, this may not happen until March."

"But it will happen eventually," he added. "After all, the fundamentals have not changed. The outlooks for the domestic and global economies are still better than for some time."

A separate report from Thomson Reuters and the University of Michigan showed that consumer sentiment held steady in February compared to expectations for a drop.

Among individual stocks, shares of LCA-Vision (LCAV) moved sharply higher after the provider of laser vision correction services agreed to be acquired by PhotoMedex (PHMD) for $5.37 per share in cash or approximately $106.4 million.

Wholesale technology distributor Ingram Micro (IM) also posted a standout gain after reporting better than expected fourth quarter results.

On the other hand, shares of Weight Watchers (WTW) came under pressure after the weight loss company reported weaker than expected fourth quarter earnings and provided disappointing guidance.

Sector News

Gold stocks showed another substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.5 percent. With the gain, the index reached its best closing level in well over three months.

A notable increase by the price of gold contributed to the strength in the sector, with gold for April delivery jumping $18.50 to $1,318.60 an ounce.

Considerable strength was also visible among steel stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Steel Index. Cliffs Natural Resources (CLF) helped lead the sector higher after reporting better than expected fourth quarter earnings.

Oil stocks also saw significant strength despite a modest drop by the price crude oil, while airline, housing and tobacco stocks also posted notable gains.

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 fell by 1.5 percent. Australia's All Ordinaries Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.1 percent, the French CAC 40 Index and the German DAX Index climbed by 0.6 percent and 0.7 percent, respectively.

In the bond market, treasuries moved slightly lower, partly offsetting the modest strength seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 2.746 percent.

Looking Ahead

Following the holiday on Monday, housing data is likely to be in focus next week, including reports on housing starts, existing home sales, and homebuilder confidence.

Reports on inflation and regional manufacturing activity may also attract some attention along with the minutes of the latest Fed meeting.

On the earnings front, Wal-Mart (WMT), Coca-Cola (KO), Hewlett-Packard (HPQ), and Groupon (GRPN) are among the companies due to report their quarterly results next week.