Stocks climb as Wall Street's focus shifts to earnings

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., February 26, 2018. REUTERS/Brendan McDermidTraders work on the floor of the NYSE in New YorkThomson Reuters

Stocks jumped Friday as Wall Street shook off fears about rising rates and the prospect of slowing economic growth around the world.

The Dow Jones industrial average jumped 0.6%, or more than 150 points. The Nasdaq composite gained 1%, and the S&P 500 rose 0.7%.

Overnight, China reported its economy expanded at the slowest pace in a decade during the third quarter. Gross domestic product rose by an annualized 6.5%, a rate not seen since 2009 and compared with expectations for 6.6% growth.

Top Chinese policymakers, including Vice Premier Liu He, jumped in to reassure businesses and investors who were already shaken by the steepest fall in Chinese equities in three years. Jason Draho, head of Americas asset allocation at UBS, said talk of stimulus programs offered markets some comfort.

"How much and how soon the stimulus will arrive is uncertain, so far to soon to say this is a turning point," he said. "Good news on China's growth and trade are two catalysts the market needs to see to get more positive on equities."

Meanwhile, some are worried the Federal Reserve could raise borrowing rates at a pace that may become slightly restrictive. In attempt to keep inflation in check and the economy from overheating, the central bank signaled this week that it was on track to gradually continue tightening.

Accendo Markets research analyst Artjom Hatsaturjants said in an email that solid earnings are helping Wall Street brush off wider concerns.

Paypal Holdings topped Wall Street expectations and reported a 78% jump in the volume of Venmo payments. Procter & Gamble also beat, helped by unexpectedly strong demand for its beauty products.

"Next week will bring the peak of the US reporting wave … and investors are looking to capture as much of that positive earnings sentiment as possible moving into the weekend," Hatsaturjants said.

Later Friday, the National Association of Realtors will report existing home sales. Data out earlier this week showed housing starts and building permits fell more than expected in September.

{{}}
Subscribe to whatsappSubscribe to whatsapp
Add Comment()
Comments ()
X
Sort By:
Be the first one to comment.
We have sent you a verification email. This comment will be published once verification is done.