By Anora Mahmudova and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- Following steep losses and massive
intraday swings over the past five days, the U.S. stock market
wrapped up the week on a relative high note, with the key
benchmarks registering more than 1% gains on Friday.
Earlier in the week, investors exhibited panicky selling
behavior as concerns over global growth, volatility in oil and the
dollar, as well as fear of the spread of Ebola, converged.
On Friday, stocks got a boost from upbeat earnings reports from
heavyweights, such as General Electric, Honeywell and Morgan
Stanley. Those cheery earnings reports may be just what the markets
need.
The S&P 500 (SPX) gained 24 points, or 1.3%, to 1,886.76,
led by gains in industrials and health care sectors. The Dow Jones
Industrial Average (DJI) jumped 263.17 points, or 1.6%, to
16,380.41.
The Nasdaq Composite (RIXF) rose 41.05 points, or 1%, to
4,258.44.
The main benchmarks were still left nursing modest weekly losses
after brutal selloffs earlier in the week. Weekly losses were
fourth in a row.
The Russell 2000 (RUT) dipped 4 points, or 0.4% to 1,082.33,
underperforming its large-cap counterpart on Friday after relative
strength over the week. Indeed, the small-cap index ended the week
with a gain of 2.8%.
J.C. Parets, founder and president of Eagle Bay Capital, warns
not to be fooled by the snapback, asserting that carnage the equity
markets experienced isn't nearly over. "We get the most vicious
rallies during market declines," he cautions in an interview.
Thursday's sharp gains came after a choppy session on Wall
Street on Thursday, when the benchmarks fell around 1% at the open.
However, they recovered throughout the day, helped by comments from
President of the St. Louis Federal Reserve James Bullard, who
raised the possibility of extending bond purchases. Bullard isn't a
voting member this year of the rate-setting Federal Open Market
Committee.
Boston Fed President Eric Rosengren told CNBC on Friday he does
not expect the U.S. economy to need another round of quantitative
easing, but added that he would not rule out that possibility.
Earnings: Several heavyweights reported results ahead of the
opening bell. General Electric Co. (GE) shares rose 2.4% after
third-quarter earnings topped market expectations.
Defense contractor Honeywell International Inc. (HON) lifted its
low end of its 2014 per-share outlook, after third-quarter earnings
beat expectations, sending the shares 4.3% higher.
Morgan Stanley (MS) gained 2.1% after the bank reported
third-quarter earnings that topped forecasts.
Movers and shakers: Urban Outfitters Inc. (URBN) slid 14% after
the retailer late Thursday warned weaker sales trends first
reported in September are continuing.
Google Inc. (GOOGL) (GOOG) shares fell 2.6% after the Internet
giant late Thursday reported third-quarter below forecasts.
SanDisk Corp. (SNDK) slumped 2.9%, after the memory-chip maker
on Thursday reported a drop in profit.
(Read more about the day's notable stocks in Movers &
Shakers column:
http://www.marketwatch.com/storyno-meta-for-guid.)
Data: Friday's economic data added to already positive mood.
Construction started on new U.S. homes rose 6.3% in September,
bouncing up after a sizable August drop, led by growth for volatile
apartment building, according to government data released
Friday.
Separately, consumer sentiment in October hit a fresh seven-year
high. Though, economists say the final release may be revised lower
on account of Ebola fears as well as turmoil on Wall Street.
Other markets: European markets rebounded after the recent
market slide, with the Stoxx Europe 600 index closing up 2.8%, its
first gain in nine sessions.
Asian stocks closed mixed, with Japan's Nikkei 225 down
1.4%.
Oil markets took a breather on Friday after crude futures
touched below $80 a barrel for the first time since June 2012 on
Thursday. Metals were mixed, while the dollar fell against most
major currencies.
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