AMAT Applied Materials Inc

Stocks showed a strong move to the upside during trading on Friday, with the major averages more than offsetting the losses posted in the previous session. With the upward move, the Dow ended the day at its best closing level in a month.

The major averages pulled back off their best levels in the latter part of the session but remained firmly positive. The Nasdaq surged 291.91 points or 1.5 percent to 19,630.20, the S&P 500 (SPI:SP500) jumped 59.32 points or 1.0 percent to 5,996.66 and the Dow climbed 334.70 points or 0.8 percent to 43,487.83.

The major averages also posted strong gains for the week. The Dow soared by 3.7 percent, while the S&P 500 and the Nasdaq shot up by 2.9 percent and 2.5 percent, respectively.

Stocks may have benefitted from the recent decrease by treasury yields even though the yield on the benchmark ten-year note recovered from an early slump to end the day roughly flat.

The recent retreat by treasury yields came as the U.S. inflation data released over the past few days led to renewed optimism about the outlook for interest rates.

Adding to the interest rate optimism, Federal Reserve Governor Christopher Waller told CNBC the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.

“As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” Waller said during an interview with Sara Eisen on CNBC’s “Squawk on the Street” on Thursday.

Waller said the number of rate cuts would be driven by the data, suggesting the Fed could cut rates three or four times if there is a lot of progress on inflation or cut rates twice or only once if inflation remains sticky.

The strength on Wall Street may also have reflected optimism about the outlook for the markets under President-elect Donald Trump, who is due to be sworn in for the second time on Monday.

Stocks surged in reaction to Trump’s election in November amid expectations of more pro-business policies in the new administration, although there are also concerns about the impact of proposed tariffs.

In U.S. economic news, the Federal Reserve released a report showing industrial production increased by much more than expected in the month of December.

The Fed said industrial production jumped by 0.9 percent in December after rising by a revised 0.2 percent in November.

Economists had expected industrial production to climb by 0.3 percent compared to the 0.1 percent dip originally reported for the previous month.

Semiconductor stocks turned in some of the market’s best performances on the day, driving the Philadelphia Semiconductor Index up by 2.8 percent.

Applied Materials (NASDAQ:AMAT) posted a notable gain after KeyBanc Capital Markets upgraded its rating on the company’s stock to Overweight from Sector Weight.

Significant strength was also visible among retail stocks, as reflected by the 1.5 percent gain posted by the Dow Jones U.S. Retail Index.

Banking, brokerage and software stocks also saw notable strength, while pharmaceutical stocks showed a substantial move to the downside.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index crept up by 0.2 percent.

Meanwhile, the major European markets also showed strong moves to the upside on the day. While the U.K.’s FTSE 100 Index surged by 1.4 percent, the German DAX Index shot up by 1.2 percent and the French CAC 40 Index jumped by 1.0 percent.

In the bond market, treasuries pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 4.609 percent after hitting a low of 4.568 percent.

Following the Martin Luther King Jr. Day on Monday, next week’s trading may be driven by reaction to the latest earnings news amid a relatively light U.S. economic calendar.

3M (NYSE:MMM), Netflix (NASDAQ:NFLX), Procter & Gamble (PG), Johnson & Johnson (NYSE:JNJ), Travelers (TRV), America Express (NYSE:AXP) and Verizon (VZ) are among the companies due to report their quarterly results.

Any significant actions in the early days of the new Trump administration following his inauguration on Monday could also impact next week’s trading.

SOURCE: RTTNEWS

Applied Materials (NASDAQ:AMAT)
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