Green arrows were seen across the board at the close of Friday's trading, as investors responded well to the latest batch of corporate earnings and economic news. The major averages all closed firmly in positive territory, with the tech-heavy Nasdaq showing a particularly strong upward move.
Stocks showed a notable upward move in early trading as traders reacted positively to better than expected quarterly results from some big-name companies, including Ford (F), which reported a narrower than expected first quarter loss.
Ford reported an after-tax net loss of $0.75 per share, but analysts expected a loss of $1.23 per share. While the loss continues to indicate weakness in the auto sector, the better-than-expected result shows that improvements are being made at Ford.
Meanwhile, Microsoft's (MSFT) third quarter earnings met expectations after excluding special charges. The software giant reported third quarter earnings of $0.33 per share, including two charges that reduced earnings by $0.06 per share, while analysts had expected Microsoft to earn $0.39 per share.
On the economic front, a Commerce Department report showed a modest decrease in new home sales in March, although the annual rate of new home sales came in well above economist estimates due to an upward revision to February sales.
The report showed that new home sales fell 0.6 percent to an annual rate of 356,000 in March from a revised February rate of 358,000. Economists had expected new home sales to remain unchanged compared to the 337,000 originally reported for the previous month.
Earlier, a separate report from the Commerce Department showed that durable goods orders fell 0.8 percent in March following a downwardly revised 2.1 percent increase in February. Economists had expected orders to fall 1.5 percent.
In other news, banks were notified privately today regarding their performance in the stress tests conducted by federal regulators, although the results will not be made public until May 4th.
While the Federal Reserve revealed details of how it conducted the stress tests, traders largely shrugged off the news, citing a lack of detail.
The major averages moved off their best levels of the day going into the close but remained firmly positive. The Dow closed up 119.23 points or 1.5 percent at 8,076.29, the Nasdaq closed up 42.08 points or 2.6 percent at 1,694.29 and the S&P 500 closed up 14.31 points or 1.7 percent at 866.23.
After falling sharply on Monday, the major averages showed a notable upward move over the remainder of the week, although they still turned in a mixed performance. While the Nasdaq closed higher for the seventh straight week, up 1.3 percent, the Dow and the S&P 500 ended their winning streaks, posting weekly losses of 0.7 percent and 0.4 percent, respectively.
A vast majority of the major sectors showed strong upward moves on the day, reflecting broad based strength in the markets.
Real estate stocks were posting some of the strong gains by the close, driving the Morgan Stanley REIT Index up 5.6 percent. With the advance, the index ended the session at its best closing level in just under three months.
Significant strength was also visible among gold stocks, which benefited from a continued increase by the price of the precious metal. With gold for June delivery closing up $7.50 at $914.10 an ounce, the Amex Gold Bugs Index closed up 6.9 percent.
Housing stocks also moving sharply higher over the course of the trading day, resulting in a 6.5 percent gain by the Philadelphia Housing Index. The index ended the session at a six-month closing high, as traders reacted positively to the new home sales data.
Oil service, steel, software and chemical stocks also posted noteworthy gains on the day, contributing to the upward move by the broader markets. The gains by oil service stocks came as crude oil for June delivery jumped $1.93 to $51.55 a barrel.
At the other end of the spectrum, brokerage stocks were some of the only significant losers of the positively skewed session. The Amex Securities Broker/Dealer Index closed down 1.9 percent after ending Thursday's trading at a five-month closing high.
A majority of the Dow components ended the session in positive territory, contributing to the triple-digit gain posted by the blue chip index.
Microsoft (MSFT) turned in one of the Dow's best performances, as traders reacted to its better than expected third quarter earnings. Shares of Microsoft closed up 10.5 percent, at their best closing level in well over four months.
Shares of American Express (AXP) also showed a particularly strong upward move, with the credit card giant closing up 20.7 percent after reporting better than expected first quarter earnings. With the gain, AmEx set a five-month closing high.
3M (MMM), DuPont (DD), and General Motors (GM) also posted notable gains, contributing to the strong upward move by the Dow. 3M closed up 5.2 percent despite lower its full year sales and earnings guidance.
Meanwhile, Wal-Mart (WMT) and McDonald's (MCD) posted notable losses, ending the session down 2 percent and 1.8 percent, respectively.
In overseas trading, stock markets across the Asia-Pacific regions closed mostly lower on Friday, with Japan's benchmark Nikkei 225 Index closing down 1.6. Hong Kong's Hang Seng Index bucked the downtrend, however, edging up 0.3 percent.
Meanwhile, the major European markets ended Friday's session near their highs of the day, with the U.K.'s FTSE 100 Index closing up 3.4 percent, while the French CAC 40 Index and the German DAX Index rose 3.1 percent and 3.0 percent, respectively.
In the bond market, treasuries saw considerable weakness amid the strength on Wall Street. Subsequently, the yield on the benchmark 10-year note ended the session up 6.9 basis points at 2.996 percent.
Earnings season remains in full swing on Monday as traders kick off a busy week. Verizon (VZ) headlines the schedule before the opening bell, while Corning (GLW), Whirlpool (WHR), and Humana (HUM) are also on the agenda.
There's no major economic news on the schedule for Monday, leaving traders to look ahead to the Federal Open Market Committee's two-day meeting, which concludes with an interest rate decision on Wednesday afternoon.
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