NEW YORK – U.S. stocks jumped Friday as investors reacted to strong corporate earnings as well as data showing home construction picked up last month. General Electric and Morgan Stanley were among the biggest gainers after each reported earnings that beat analysts' estimates.
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KEEPING SCORE: The Dow Jones industrial average rose 264 points, or 1.6 percent, to 16,379 as of 11:20 a.m. Eastern Time. The Standard & Poor's 500 index gained 31 points, or 1.7 percent, to 1,893. The Nasdaq composite added 68 points, or 1.6 percent, to 4,286.
VOLATILITY BREATHER? Investors have been riding wild market swings for much of the week. The increased volatility reflects heightened concerns about weaker growth in Europe and its implications on corporate profits, as well as plunging oil prices and many geopolitical uncertainties, from conflicts in Syria and Iraq to the unknown impact of the Ebola virus outbreak.
The bounce can be attributed to a few factors, traders said. St. Louis Federal Reserve President James Bullard said in an interview Thursday that the central bank should delay cutting back any economic stimulus efforts, which helped boost the market. Also the S&P 500 and Nasdaq composite came close to entering into what's known as a correction, a key level that sometimes causes technical traders to step back into the market. Also, strong corporate earnings are helping allay investors' concerns.
"There's got to be a little bit of a relief rally in this," said Drew Wilson, equity analyst with Fenimore Asset Management.
TRADING BOOST: Morgan Stanley reported that its net income nearly doubled in the third quarter, helped by strength in its institutional securities and wealth management divisions. The investment bank's results topped Wall Street expectations. Morgan Stanley rose 81 cents, or 2.5 percent, to $33.36.
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BEATING THE STREET: General Electric's shares rose nearly 4 percent after the company reported better-than-anticipated third-quarter profit, citing improved performance in its aviation and oil and gas divisions. The stock rose 91 cents to $25.16.
HARD HAT AREA: Homebuilder stocks rose after the Commerce Department reported that construction firms broke ground on more apartment complexes in September, pushing up the pace of U.S. homebuilding up 6.3 percent to a seasonally adjusted annual rate of 1.017 million homes. Apartment construction has surged 30.3 percent over the past 12 months. Hovnanian Enterprises jumped 18 cents, or 5 percent, to $3.68 and Beazer Homes rose 52 cents, or 3 percent, to $17.51.
OVERSEAS MARKETS: After sharp falls earlier this week, European markets rose, continuing a pattern of highly volatile trading. France's CAC 40 rose 2.2 percent, while Germany's DAX jumped 2 percent. Britain's FTSE 100 rose 1.3 percent. In Asia, Hong Kong's Hang Seng rose 0.5 percent and Australia's S&P/ASX 200 added 0.3 percent. Japan's Nikkei 225 sank 1.4 percent.
BONDS AND OIL: U.S. Treasury yields rose as their prices fell. The yield on the 10-year Treasury note rose to 2.22 percent from 2.15 percent late Thursday. Benchmark U.S. crude rose 46 cents to $83.14 a barrel in New York.