Stocks Give Back Ground But Remain Firmly Positive - U.S. Commentary

(RTTNews) - After moving sharply higher in early trading on Friday, stocks have given back some ground but remain mostly positive. Profit taking has still pulled the major averages down off their two-month highs set earlier in the session.

Currently, the major averages remain firmly positive, with the tech-heavy Nasdaq outperforming its counterparts. While the Nasdaq is up 88.56 points or 1.8 percent at 5,008.61, the Dow is up 88.12 points or 0.5 percent at 17,577.28 and the S&P 500 is up 14.95 points or 0.7 percent at 2,067.46.

The early rally on Wall Street partly reflected a positive reaction to news China's central bank unexpectedly lowered interest rates.

The People's Bank of China cut both the one-year lending rate and the deposit rate by a quarter-point, marking the sixth rate cut since last November.

In a statement, the central bank noted a need to continue the flexible use of monetary policy tools to create an environment for stable and healthy economic development.

Following yesterday's comments from European Central Bank President Mario Draghi, the news has added to optimism the global central banks will provide further stimulus.

Additionally, the markets have benefited from strong gains by three tech giants that reported their quarterly results after the close of trading on Thursday.

Shares of Microsoft (MSFT) are moving sharply higher after the software giant reported better than expected fiscal first quarter results. The results received a boost from the company's cloud business.

Google parent Alphabet (GOOG) and online retailer Amazon (AMZN) are also posting notable gains after reporting quarterly earnings that exceeded estimates.

Shares of Procter & Gamble (PG) have also moved to the upside after the consumer products giant reported better than expected first quarter earnings.

On the other hand, apparel maker VF Corp. (VFC) has come under pressure after reporting third quarter results that missed estimates and providing disappointing guidance.

Sector News

Computer hardware stocks continue to turn in a strong performance on the day, with the NYSE Arca Computer Hardware Index up by 2.7 percent. The strength in the sector partly reflects optimism in reaction to recent tech earnings.

Super Micro Computer (SMCI) is posting a standout gain after the server technology company reported first quarter results that came roughly in line with analyst estimates.

Reflecting strength throughout the tech sector, internet, electronic storage, and networking stocks are also seeing considerable strength.

Pharmaceutical stocks have also moved sharply higher, driving the NYSE Arca Pharmaceutical Index up by 1.9 percent. The gain by the index comes after it bucked the uptrend seen in the previous session.

While financial and gold stocks are also seeing significant strength, notable weakness has emerged among energy and utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved higher on Friday following the overnight rally on Wall Street. Japan's Nikkei 225 Index surged up by 2.1 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K's FTSE 100 Index advanced by 1.1 percent, the French CAC 40 Index and the German DAX Index soared 2.5 percent and 2.9 percent, respectively.

In the bond market, treasuries have come under pressure amid the continued strength among stocks. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6 basis points at 2.085 percent.