RTTNews - Stocks saw a notable rally on Friday, fueled by the day's encouraging economic data. The major averages all finished in positive territory by notable margins, offsetting some of the losses posted earlier in the week.

Buying interest in stocks was sparked by a Labor Department report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July.

The report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.

Additionally, the Labor Department said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.

In an interview with RTT News, Jim Awad, managing director of Zephyr Management said the report adds credibility to the case that we are on the cusp of turning in the economy.

Awad added, It's a positive piece of the puzzle. For those of us that have been skeptical.it's a humbling experience.The economy appears to be turning the corner.

On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.

Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.

The major averages ceded some ground in late session trading but still finished with strong gains. The Dow closed up by 113.81 points or 1.2 percent at 9,370.07, the Nasdaq climbed by 27.09 points or 1.4 percent to 2,000.25, and the S&P 500 rose by 13.40 points or 1.3 percent to 1,010.48.

With the gains, the major averages all closed higher for the week, marking the fourth consecutive week of gains. The Dow and the S&P 500 posted weekly gains of 2.2 percent and 2.3 percent, respectively, while the Nasdaq rose by a more modest 1.1 percent for the week.

Sector News

Commercial real estate stocks saw significant gains on the day, with the Morgan Stanley REIT Index rising by 5.4 percent. With the gain, the real estate index ended the session at its best closing level in nine months.

Strong gains were also visible among retail stocks, as reflected by the 3.6 percent gain posted by the S&P Retail Index. The advance helped the index to finish at its best level in ten months.

Railroad and housing stocks also showed strong upward moves, with the Dow Jones Railroads Index and the Philadelphia Housing Sector rising by 5 percent and 4.7 percent, respectively. The railroads index closed at a nine month high, while the housing index finished at its highest level in ten months.

While banking, electronic storage and defense stocks are also saw solid gains, gold stocks disappointed amid a retreat in the price of the precious metal on the NYMEX. More modest weakness emerged among semiconductor and biotechnology stocks.

Dow Components

A vast majority of the Dow components ended the day in positive territory, contributing to the triple-digit gain posted by the blue chip index.

Credit card giant American Express (AXP) was one of the Dow's best performers, posting a gain of 4.4 percent. With the gain, the stock finished the session at a ten-month closing high.

JP Morgan Chase (JPM) also rose by a significant margin, advancing by 4 percent on the day. The gain propelled the stock to its best closing price in nearly ten months.

Further, Disney (DIS) also turned in a strong performance, surging up by 5.2 percent. Despite the strong upward move, the stock was unable to break out of a two-week trading range.

Hewlett Packard (HPQ), General Electric (GE), Home Depot (HD), Boeing (BA) and Merck (MRK) also rose by considerable margins, while Bank of America (BAC) was unable to hold onto earlier gains and finished notably lower.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Friday. Japan's benchmark Nikkei 225 Index rose by 0.2 percent, while Hong Kong's Hang Seng Index slipped by a substantial margin, posting a loss of 2.5 percent.

Meanwhile, the major European markets closed notably higher, with the French CAC 40 Index and the German DAX Index posting gains of 1.3 percent and 1.7 percent, respectively, while the U.K.'s FTSE 100 Index rose by 0.9 percent.

In the bond markets, treasuries saw notable weakness following today's employment data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.8 basis points to 3.854 percent.

Looking Ahead

Next week, traders may look to reports on labor productivity and costs, international trade, retail sales, industrial production and consumer sentiment along with the standard weekly jobs data.

In addition, the Federal Reserve will make its interest rate announcement on Wednesday, with the key fed funds rate expected to remain unchanged amid a challenging economic environment.

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