By Dow Jones Business News,
August 08, 2014, 04:58:00 PM EDT
By Matt Jarzemsky
U.S. stocks rallied Friday, pulling the Dow industrials into positive territory for the week, as reports of easing
tensions in Ukraine put traders at ease.
The Dow Jones Industrial Average rose 185.66 points, or 1.1%, to 16553.93.
The S&P 500 added 22.02 points, or 1.2%, to 1931.59. The Nasdaq Composite Index increased 35.93 points, or 0.8%, to
Safe-haven bonds inched higher, ending well off the day's highs. The 10-year Treasury note's yield--which moves
inversely to its price--inched up to 2.420%, after hitting an intraday low of 2.35%.
Stocks extended gains while bonds pulled back after news service Interfax reported Russia had ended military
exercises that the U.S. had criticized as a "provocative" step amid the country's conflict with Ukraine. The report
followed Nikolai Patrushev, secretary of Russia'sSecurity Council, telling state-run RIA Novosti news agency that "
Russia will continue to make all efforts for a very fast de-escalation of tensions."
"With the Ukraine situation playing out the way it is, there was a lot of uncertainty what was happening next,"
said Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. "It seemed like things were heating up there. Now
it seems like Russia seems to be taking more of a constructive tone. As a result of that, [investors] are taking a more
Traders said much of the buying in stocks was the result of short term-oriented traders such as hedge funds closing
out defensive positions from earlier in the week, when the geopolitical situation looked potentially more dire.
Meanwhile, U.S. stock investors have been weighing whether to jump back in after a recent pullback, market
participants say. The Dow average is still down 3.4% from its July 16 record closing high. It gained 0.4% this week but
is off 0.1% on the year.
Friday's action marked a reversal from weakness in U.S. stock futures and overseas markets overnight, which market
participants attributed to anxiety over greater U.S. involvement in Iraq's military conflict. American jet fighters
bombed Islamic State positions in Iraq on Friday, in an effort to halt extremists' advance in the country.
Elsewhere in global markets, the Stoxx Europe 600 fell 0.6%. Japan's Nikkei Stock Average fell 3% for its biggest
daily slide in nearly four months. Both indexes closed before the Russia headlines, which investors broadly interpreted
as bullish for risky assets such as stocks.
On the economic front, wholesale inventories rose 0.3% in June, less than economists expected. A measure of U.S.
workers' productivity improved 2.5% in the second quarter, the Labor Department reported, topping the median forecast of
economists in a Wall Street Journal poll. Unit labor costs, a gauge of inflationary pressure, rose a less-than-expected
In corporate news, Lululemon Athletica Inc. founder Dennis "Chip" Wilson agreed to sell half his stake in the
company to a private-equity firm for $845 million. Shares rose 2.8%.
Zynga Inc. shares fell 1.4% after the videogame maker reported a wider second-quarter loss and lowered its
financial outlook for the year.
Write to Matt Jarzemsky at firstname.lastname@example.org
(END) Dow Jones Newswires
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