RTTNews - After a considerable upward move in the previous session, stocks saw some further upside over the course of the trading day on Friday. A late-session rally helped the major averages to finish the month of May on a high note, further building on recent gains.
Early this morning, traders digested a revised May consumer sentiment report from Reuters and the University of Michigan that showed its best results in eight months.
The revised reading came in at 68.7, higher than the previously reported reading of 67.9. The result was also higher than April's final level of 65.1. Analysts expected the survey to yield a reading of 68.0.
Separately, the Commerce Department said that gross domestic product for the first quarter contracted, although at a slower rate than previously estimated.
Specifically, the data said that gross domestic product fell 5.7 percent in the first quarter compared to the advance estimate of a 6.1 percent decrease. Economists had been expecting the pace of contraction to be revised to 5.5 percent.
Meanwhile, optimism was limited by manufacturing data from the Chicago area that continued to show a notable slowdown in the region.
The ISM-Chicago said its index of activity in the manufacturing sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists expected the index to edge up to a reading of 42.0.
On the corporate front, automaker General Motors (GM) plans to file for bankruptcy protection June 1st, according to reports. Most of the company's assets would be sold to a new company sponsored by the U.S. Treasury Department.
Today, UAW-represented employees ratified modifications to the GM-UAW 2007 national labor agreement. The amended agreement covers about 54,000 hourly employees located in 46 U.S. facilities and is expected to help GM restructure when it enters bankruptcy.
In other news, President Barack Obama announced the establishment of a cyber security office. The new office is expected to establish a system that will restrict outside access to government networks, which have been identified as an area of concern by the administration.
In addition to announcing the new office, President Obama also stated his goal for a new education initiative aimed at increasing awareness of cyber security threats.
The major averages soared in the last 30 minutes of trading, closing near their best levels of the day. The Dow closed up 96.53 points or 1.2 percent at 8500.33, the Nasdaq closed up 22.54 points or 1.3 percent at 1774.33, and the S&P 500 finished up 12.31 points or 1.4 percent at 919.14.
The major sectors added to their modest advances in late session trading, helping the major averages to a strong finish.
Transportation stocks turned in some of the more outstanding performances of the day, with the Dow Jones Railroads Index and the Dow Jones Trucking Index closing up by 6.6 percent and 4.2 percent, respectively.
Gold, oil, steel, and natural gas stocks also posted strong gains amid rising commodity prices. Specifically, the Amex Steel Index extended its recent gains, closing up by 1.9 percent on the session, finishing at its best level in nearly eight months.
The steel sector was boosted by shares of Allegheny Technologies (ATI) and Cliffs Natural Resources (CLF), which closed up 5.8 percent and 4.9 percent, respectively.
In addition, healthcare provider, chemical and commercial real estate stocks also saw notable strength on the day.
Meanwhile, losses by defense stocks helped to moderate the day's gains, as reflected by the 0.5 percent pullback by the Philadelphia Defense Sector Index.
Most of the Dow components ended the day in positive territory, contributing to the strong gain posted by the blue chip index.
Coca-Cola (KO) turned in one of the Dow's best performances, with the beverage giant closing up 4.8 percent. With the gain, Coca-Cola ended the session at its best closing level in almost eight months.
Drug giants Pfizer (PFE) and Merck (MRK) also posted strong gains, ending the session up 3.4 percent and 3 percent, respectively. Caterpillar (CAT), DuPont (DD), and American Express (AXP) also posted notable gains on the day.
Meanwhile, shares of General Motors experienced considerable weakness amid reports that the auto giant will file for bankruptcy on Monday. GM ended the session down 33 percent, pulling back below the $1 per share level.
In overseas trading, stock markets across the Asia-Pacific region turned in a strong performance on Friday. Japan's benchmark Nikkei 225 Index rose 0.8 percent, while Hong Kong's Hang Seng climbed 1.6 percent.
The major European markets also ended the day moderately higher. The French CAC 40 Index and the German DAX Index closed up 0.4 percent and 0.2 percent, respectively, while the U.K.'s FTSE 100 Index rose 0.7 percent.
In the bond market, treasuries saw considerable strength on the session, partly offsetting their recent losses. Subsequently, the yield on the benchmark ten-year note closed down 20.7 basis points at 3.465 percent.
Next week, trading may be impacted by the release of reports on manufacturing and service sector activity as well as personal income and spending data, although most traders are likely to focus on the government's monthly employment report due out next Friday.
Additionally, Altera (ALTR), VeriFone (PAY), Collective Brands (PSS), Ciena (CIEN), and Guess (GES) are among the companies due to release their quarterly results next week.
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