Stocks See Modest Strength Following Mixed Batch Of Data - U.S. Commentary

(RTTNews) - Stocks moved modestly higher over the course of the trading day on Friday, although buying interest remained relatively subdued. Uncertainty about the outlook for next week's Federal Reserve meeting kept some traders on the sidelines.

The major averages ended the day in positive territory, resuming the upward trend seen earlier in the week. The Dow rose 75.42 points or 0.5 percent to 15,376.06, the Nasdaq edged up 6.22 points or 0.2 percent to 3,722.18 and the S&P 500 climbed 4.57 points or 0.3 percent to 1,687.99.

For the week, the major averages all posted notable gains. The Dow surged up by 3 percent, while the Nasdaq and the S&P 500 jumped by 1.7 percent and 2 percent, respectively.

The modest strength on Wall Street came following the release of a report from the Commerce Department showing weaker than expected retail sales growth in the month of August.

The report said retail sales rose by 0.2 percent in August following an upwardly revised 0.4 percent increase in July.

Economists had expected sales to climb by 0.5 percent compared to the 0.2 percent growth originally reported for the previous month.

The disappointing data seemed to generate some optimism that the Federal Reserve will delay plans to begin scaling back its asset purchase program at next week's meeting.

At the same time, some negative sentiment was generated by a report from Thomson Reuters and the University of Michigan showing a sharp drop in consumer sentiment in the month of September.

The report said the preliminary reading on the consumer sentiment index for September came in at 76.8, down from August's final reading of 82.1. Economists had expected the index to edge down to 82.0.

With the much bigger than expected decrease, the consumer sentiment index fell to its lowest level since hitting 76.4 in April.

Reuters said survey director Richard Curtin attributed the decline to "growing concerns that higher interest rates will diminish the pace of economic growth as well as job gains."

A separate report from the Labor Department showed that producer prices rose by more than expected in the month of August amid notable increases in food and energy prices.

Sector News

Airline stocks turned in some of the market's best performances on the day, resulting in a 2.3 percent gain by the NYSE Arca Airline Index. With the gain, the index climbed back near the one-month closing high set on Tuesday.

The strength in the oil-sensitive airline sector came amid a pullback by the price of crude oil, with crude for October delivery sliding $$0.39 to $108.21 a barrel.

Considerable strength also emerged among gold stocks, which moved higher despite a notable decrease by the price of the precious metal. Reflecting the strength in the gold sector, the NYSE Arca Gold Bugs Index advanced by 1.4 percent.

Healthcare provider and health insurance stocks also turned in strong performances, with the Morgan Stanley Healthcare Provider Index and the Morgan Stanley Healthcare Payor Index both rising by 1.4 percent. The Healthcare Payor Index reached a new record closing high.

Tobacco, chemical, and utilities stocks also saw some strength on the day, while most of the other major sectors showed only modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index edged down by 0.2 percent.

The major European markets also ended the day mixed. While the U.K.'s FTSE 100 Index slipped by 0.1 percent, the French CAC 40 Index and the German DAX Index both rose by 0.2 percent.

In the bond market, treasuries experienced choppy trading throughout the session before closing slightly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by about a basis point to 2.898 percent.

Looking Ahead

The outcome of the Fed meeting will be in the spotlight next week, potentially overshadowing reports on industrial production, consumer prices, housing starts, and existing home sales.