U.S. Stocks See Further Upside After Early Recovery

(RTTNews) - After turning positive early in the session, stocks have seen further upside over the course of the trading day on Friday. The major averages have moved steadily higher as the day has progressed, partly offsetting recent weakness.

Currently, the major averages are hovering near their best levels of the day. The Dow is up 807.31 points or 1.9 percent at 43,149.55, the Nasdaq is up 358.09 points or 1.9 percent at 19,730.85 and the S&P 500 is up 106.43 points or 1.8 percent at 5,973.51.

The rally that has emerged on Wall Street comes as traders react to the release of the Federal Reserve's preferred readings on consumer price inflation.

The Commerce Department said its personal consumption expenditures (PCE) price index inched up by 0.1 percent in November after rising by 0.2 percent in October. Economists had expected prices to increase by another 0.2 percent.

The annual rate of growth by the PCE price index accelerated to 2.4 percent in November from 2.3 percent in October, slightly slower than the 2.5 percent jump economists had expected.

Excluding food and energy prices, the core PCE price index also edged up by 0.1 percent in November after climbing by 0.3 percent in October. Economists had expected core prices to rise by 0.2 percent.

The annual rate of growth by the core PCE price index in November came in at 2.8 percent, unchanged from October, while economists had expected an acceleration to 2.9 percent.

The slower than expected annual rates of growth have seemingly inspired traders to pick up stocks at relatively reduced levels following the mid-week sell-off.

Stocks plummeted on Wednesday after the Fed forecast fewer than previously estimated interest rate cuts next year amid lingering concerns about sticky inflation.

Chicago Fed President Austan Goolsbee told CNBC's Steve Liesman he's hopeful the data suggests "the couple of months of firming were more of a bump than a change in path."

Meanwhile, traders have largely shrugged off concerns about a potential U.S. government shutdown, potentially reflecting optimism lawmakers will reach a last-minute deal, as is often the case.

Sector News

Networking stocks have shown a substantial move to the upside on the day, resulting in a 2.7 spike by the NYSE Arca Networking Index.

Significant strength is also visible among semiconductor stocks, as reflected by the 2.6 percent surge by the Philadelphia Semiconductor Index.

Commercial real estate stocks also continue to see considerable strength, with the Dow Jones U.S. Real Estate Index jumping by 2.5 percent after ending the previous session at its lowest closing level in over five months.

Banking, gold, computer hardware and airline stocks have also shown strong moves to the upside amid broad based buying interest on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. China's Shanghai Composite Index edged down by 0.1 percent and Japan's Nikkei 225 Index dipped by 0.3 percent, while Australia's S&P/ASX 200 Index slumped by 1.2 percent.

Meanwhile, European stocks climbed well off their worst levels but still ended the day modestly lower. While the German DAX Index fell by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index both slipped by 0.3 percent.

In the bond market, treasuries are regaining ground after moving sharply lower over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.4 basis points at 4.496 percent.