U.S. Equities Rise After Selloff in Previous Session

Dow Jones Newswires

U.S. stocks rebounded in early trading a day after major indexes posted their largest one-day losses since late July.

The Dow Jones Industrial Average gained 51 points, or 0.3%, to 16997. The S&P 500 gained two points, or 0.1%, to 1698. The Nasdaq Composite Index advanced 12 points, or 0.3%, to 4478.

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The Dow was buoyed by a rally in shares of Nike Inc., which reported a 23% increase in quarterly profits. Shares of the shoemaker rose 9.8% shortly after the open.

Stocks tumbled Thursday, with the Dow shedding 1.5% to 16945.80. The S&P 500 dropped 1.6% to 1965.99. Losses came amid ongoing concerns about global growth, the pace of Federal Reserve tightening and rising tensions between Western countries and Russia.

Recent action leaves the major indexes poised for weekly losses. The S&P 500 is off 2% this week. Investors remained concerned about economic growth overseas, especially in China and the eurozone.

Others remain optimistic about the outlook for stocks, arguing that steady economic growth in the U.S. means that the market can handle tighter Fed policy. Investors widely expect the central bank to raise rates sometime next year after winding down its bond-buying program in October.

Before the open, the Commerce Department reported that the U.S. economy grew at a rate of 4.6% in the second quarter, up from a previous estimate of 4.2%. The result was in line with expectations. The final reading on September's consumer sentiment is expected later in the morning.

"Ultimately strong economic growth is good for the markets," said Doug Cote, chief market strategist at Voya Investment Management. "I'm a buyer at these levels."

Shares of Janus Capital Group Inc. rose 35%. Bill Gross, founder of Pacific Investment Management Co., will join Janus next week.

Stocks were mixed overseas. Japan's Nikkei Stock Average fell 0.9% to 16,229.86, dropping back into negative territory for the year. In Europe, the Stoxx Europe 600 index gained 0.4%.

Some investors say that Thursday's selloff and the resulting spike in market volatility simply mark a return to normal trading patterns after a sleepy summer for stocks.

"You should expect more volatility than we've had in the past couple years, and this week is a bit of a taste of that," said Russ Koesterich, chief investment strategist at BlackRock.

For Friday "it looks like the market has quieted down," Mr. Koesterich said. "A couple things are helping--the GDP print was in line, and also we didn't see a lot of follow-through selling overseas."

The dollar continued to strengthen against major rivals. The euro fell to $1.27 from $1.2751 late Thursday.

The yield on the benchmark 10-year Treasury note rose to 2.522%, according to FactSet. Yields move inversely with prices.

In other corporate news, BlackBerry Ltd. posted earnings results, which included a smaller-than-expected loss and a sharp drop in revenue. Shares rose 3%.

Shares of Apple Inc. rose 1.5%. The company has been defending itself against reports that its new, larger iPhone bends easily in people's pockets. The company also released a new update of software for its mobile devices after yanking its previous update.