RTTNews - Following a choppy trading session, stocks were able to eke out mild gains on Friday as earnings reports and housing data saw limited reaction. The Dow and Nasdaq finished on the upside, while the S&P 500 closed just below the unchanged mark.
Reaction to earnings was largely subdued as a number of firms were able to beat estimates based on cost cutting measures rather than revenue growth.
Traders looked to results from Google (GOOG) and IBM Corp. (IBM), which firmly beat Wall Street estimates, while financial stalwarts Bank of America (BAC) and Citigroup (C) also bested forecasts, but by more modest margins. Conglomerate General Electric (GE) and toymaker Mattel (MAT) also surpassed expectations.
Equities also saw little reaction to a report from the U.S. Commerce Department which showed housing starts rose 3.6 percent to an annual rate of 582,000 units in June from a revised pace of 562,000 units in the previous month.
Economists were expecting the figure to remain relatively stable with the pace of 532,000 units that was originally reported for May. The report also showed that building permits, an indicator of future housing demand, climbed 8.7 percent to an annual pace of 563,000 from the revised May rate of 518,000.
Moderate upside was seen this afternoon following reports that commercial lending giant CIT Group (CIT) is in talks with Goldman Sachs and JP Morgan Chase to secure financing after negotiations with the government to secure funding reached an impasse, signaling a likelihood of bankruptcy.
The major indices all saw modest gains heading into the close, with only the S&P 500 unable to break into the green. The Dow finished up by 32.12 points or 0.4 percent at 8,743.94, the Nasdaq rose by 1.58 points or 0.1 percent to 1,886.61, while the S&P 500 slipped by 0.36 points or less than a tenth of a percent to 940.38.
For the week the, Dow advanced by 7.3 percent, the Nasdaq gained 7.4 percent and the S&P 500 climbed by 7 percent.
Tobacco, gold, computer hardware and housing stocks turned in some of the day's best performances, building on their recent gains. Notably, the Philadelphia Housing Sector closed up by 1.2 percent, finishing at its best level in just over one month's time.
While semiconductor, telecommunication and railroad stocks also rose by solid margins, notable weakness was seen in commercial real estate and banking stocks. Subsequently, the Morgan Stanley Real Estate Index and the Kbw Banking Sector Index fell by 2.8 percent and 2.2 percent, respectively. With the pullback, the indices offset some of the gains posted during the broad-based rally seen this week.
Healthcare provider, defense and airline stocks also declined on the day, with the Morgan Stanley Healthcare Provider Index and the Philadelphia Defense Sector retreating by 2 percent and 1.7 percent, respectively, while the NYSE Arca Airline Index fell by 1.1 percent.
The healthcare provider and defense indices moved off of one month highs posted in the previous session, while the airline index backed away from its best closing level in over two months.
The Dow was led higher by shares of IBM Corp. which closed up by 4.3 percent, extending its gains for a third straight session, while finishing at its best closing price in over nine months. The upward move was prompted by better than expected earnings results and an increase in the firm's full year guidance.
Strength was also visible in shares of JP Morgan Chase (JPM) which rose by 2.1 percent. The day's advance lifted the stock to its best finish in well over one month's time.
Dow components Cisco (CSCO) and Intel (INTC) also rose by considerable margins, rising by 1.9 percent and 1.6 percent, respectively. With the move, the stocks closed at their best levels in over nine months.
While Procter & Gamble (PG), AT& T (T), Home Depot (HD) and McDonald's (MCD) also rose, General Electric limited the day's gains in the blue chip index, falling by 6.1 percent.
The loss in General Electric came as the firm reported second quarter revenues that fell short of analyst expectations, although earnings figures edged out forecasts. The stock pulled back off of a one month closing high set in the previous session.
Further, Bank of America fell by 2.1 percent despite reporting earnings that beat out estimates and revenues that came in-line with analyst expectations. Disappointing performances were also turned in by shares of Alcoa (AA), Boeing (BA), Disney (DIS) and Kraft Foods (KFT).
In overseas trading, stock markets across the Asia-Pacific region closed higher on Friday, with Hong Kong's Hang Seng Index climbing by 2.4 percent while Japan's benchmark Nikkei 225 Index posted a much more modest gain of 0.6 percent.
The major European markets closed on the upside, with the German DAX Index finishing higher by 0.4 percent, while the French CAC 40 Index and the U.K.'s FTSE 100 both rose by 0.6 percent.
In the bond markets, treasuries closed near their worst levels of the day. Subsequently, the benchmark ten-year note finished at 3.651 percent, posting a gain of 9.4 basis points.
With a light economic calendar on tap for next week, trader attention will be especially drawn to data on jobless claims, existing home sales and consumer sentiment, in addition to an influx of earnings figures.
On Monday, traders will digest quarterly results from Halliburton (HAL), Hasbro (HAS), Texas Instruments (TXN) and others.
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