Better-than-expected earnings from major companies guided the
benchmarks to a finish in the green on Friday. The S&P 500
finished at a record high for the second consecutive day.
Following a last-minute deal which ended the government shutdown
and raised the debt ceiling, investors have now shifted their
focus to corporate earnings. Investor sentiment also received a
lift after China's GDP grew appreciably in the third quarter. The
technology sector was the biggest gainer among the S&P 500
industry groups, led by tech giant Google. The health care sector
was the only loser.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.2% to close the
day at 15,399.65. The S&P 500 added 0.7% to finish
yesterday's trading session at 1,744.50. The tech-laden Nasdaq
Composite Index climbed 1.3% to end at 3,914.28. The fear-gauge
CBOE Volatility Index (VIX) declined 3.4% to settle at 13.04.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.57 billion shares,
considerably lower than 2013's average of 6.0 billion shares.
Advancing stocks outnumbered the decliners. For 70% shares that
advanced, only 28% declined.
The Dow gained 1.1%, the S&P 500 climbed 2.4% and the Nasdaq
jumped 3.2% over the week. The previous week's gains were driven
by the successful debt ceiling deal and end to the sixteen-day
long partial government shutdown. On Friday, stocks gained on the
back of encouraging earnings from major companies. The S&P
500 and the Nasdaq logged their best weekly gains in three
Shares of technology bellwether Google Inc (NASDAQ:
) rocketed more than 13%, crossing $1000 per share for the first
time after the company announced its quarterly results. Both
earnings and revenue surpassed the Street's estimates. Google's
earnings were boosted by growth in its advertising business. Net
income jumped 36% to $2.97 billion in the third-quarter from the
year ago figure of $2.18 billion. The company's consolidated
revenue jumped to $14.89 billion from $13.3 billion a year ago.
General Electric Company (NYSE:
) also announced its third quarter earnings. The conglomerate's
earnings came in above the Street's estimates but revenues fell
marginally short of expectations. The company's profits declined
in the third quarter due to a fall in revenue from its water and
power business. Shares jumped more than 3% on Friday. On the
other hand, shares of Morgan Stanley (NYSE:
) climbed nearly 3% after the company declared its quarterly
results. The company's earnings surpassed the Street's estimates
as revenue jumped nearly 30%. Third quarter results were boosted
by equity trading and wealth management business.
Speaking about the Federal Reserve's bond tapering issue, Chicago
Federal Reserve Bank President Charles Evans said the central
bank's policy makers do not have any positive economic signs that
will allow them to taper the massive bond buying program. He
said: "My own personal view is, I don't think that we have enough
positive additional information going into the next meeting to
all of a sudden decide that it's appropriate to taper."
On the international front, China's National Bureau of Statistics
reported that the country's GDP increased to 7.8% in the third
quarter from the second quarter figure of 7.5%. However, a
fall in industrial output in September and easing growth in
retail sales gives an indication that the world's second largest
economy is slowing down at the end of the third quarter.
The technology sector was the biggest gainer among the S&P
500 industry groups and the Technology SPDR (XLK) gained 1.7%,
fueled by encouraging earnings from internet giant's Google.
Stocks such as Apple Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
), Yahoo! Inc. (NASDAQ:
) and Oracle Corporation (NYSE:
) added 0.9%, 0.1%, 2.1% and 0.1%, respectively.
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