Upward Momentum Leads To Continued Strength On Wall Street - U.S. Commentary

(RTTNews) - Stocks moved mostly higher over the course of the trading session on Friday, extending the upward trend seen over the past several sessions. With the gains, the major averages once again ended the session at their best closing levels in well over two months.

The major averages finished the day firmly in positive territory. The Dow climbed 120.81 points or 0.7 percent to 17,602.30, the Nasdaq rose 20.66 points or 0.4 percent to 4,795.65 and the S&P 500 advanced 8.97 points or 0.4 percent to 2,049.56.

For the week, the Dow surged up by 2.3 percent, while the Nasdaq and the S&P 500 jumped by 1 percent and 1.4 percent, respectively.

Amid a relatively quiet day, stocks appeared to benefit from the upward momentum seen on Wall Street since the Federal Reserve's monetary policy announcement on Wednesday.

The Fed announcement was widely interpreted as dovish, as the revised forecast for interest rates showed that officials now expect only two rate hikes by the end of this year compared to the four predicted back in December.

The new median projection calls for rates at 0.9 percent at year's end, down from the previous estimate of 1.4 percent.

The markets have subsequently benefited from easing concerns about the Fed raising rates and derailing the economy amid some recent signs of sluggishness.

Meanwhile, traders largely shrugged off a report from the University of Michigan showing an unexpected drop in consumer sentiment in the month of March.

The report said the preliminary reading on the consumer sentiment index for March came in at 90.0 compared to the final February reading of 91.7. The drop surprised economists, who had expected the index to inch up to a reading of 92.2.

With the unexpected decrease, the consumer sentiment index fell to its lowest level since a matching reading last October.

Richard Curtin, the survey's chief economist, said, "Consumer confidence eased in early March due to increased concerns about prospects for the economy as well as the expectation that gas prices would inch upward during the year ahead."

Among individual stocks, shares of Adobe Systems (ADBE) moved notably higher after the software developer reported better than expected first quarter results and provided upbeat guidance.

Shoe retailer Shoe Carnival (SCVL) also posted a strong gain after reporting fourth quarter results that beat analyst estimates.

On the other hand, shares of Eagle Pharmaceuticals (EGRX) came under pressure after the FDA rejected the company's drug to prevent blood clots in certain patients undergoing heart surgery.

Sector News

After bucking the uptrend by the broader markets over the past few sessions, biotechnology stocks finally joined in the upward move. The NYSE Arca Biotechnology Index jumped by 2.2 percent, bouncing off its lowest closing level in a month.

BioMarin Pharmaceutical (BMRN), Ionis Pharmaceuticals (IONS), and Charles River Labs (CRL) turned in some of the biotech sector's best performances.

Banking stocks also showed a strong move to the upside on the day, driving the Dow Jones Banks Index up by 2 percent. With the gain, the index ended the session at a two-month closing high.

Financial giants Bank of America (BAC) and JP Morgan (JPM) helped lead the banking sector higher after announcing new stock buyback programs.

Considerable strength was also visible among transportation stocks, which added to yesterday's rally. The Dow Jones Transportation Average surged up by 1.5 percent to its best closing level in well over three months.

Electronic storage, brokerage, and semiconductor stocks also moved notably higher, while oil service pulled back along with the price of crude oil.

Other Markets

In overseas trading, most stock markets across the Asia-Pacific region moved higher on Friday. Hong Kong's Hang Seng Index advanced by 0.8 percent and China's Shanghai Composite Index jumped by 1.7 percent. Japan's Nikkei 225 Index bucked the uptrend once again, however, falling by 1.3 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index edged down by 0.2 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index climbed by 0.6 percent.

In the bond market, treasuries moved higher over the course of the session, extending a recent uptrend. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to 1.871 percent.

Looking Ahead

Next week is relatively quiet on the U.S. economic front, although traders are likely to keep an eye on reports on new and existing home sales and durable goods orders.

Nonetheless, the Good Friday holiday next Friday may keep some traders on the sidelines ahead of the long Easter weekend.