Stocks Give Back Ground But Remain Mostly Positive - U.S. Commentary

(RTTNews) - After moving mostly higher earlier in the day, stocks have given back some ground over the course of trading session on Friday. The major averages have pulled back off their best levels of the day but remain in positive territory.

Currently, the major averages are posting moderate gains. The Dow is up 41.77 points 0.2 percent at 17,971.76, the Nasdaq is up 26.06 points or 0.5 percent at 4,868.73 and the S&P 500 is up 5.80 points or 0.3 percent at 2,104.66.

The early strength on Wall Street extended the rally seen over the three previous sessions, with the major averages nearly offsetting the sell-off seen in the two sessions following Britain's vote to leave the European Union.

Buying interest was generated by the release of a report from the Institute for Supply Management showing a much bigger than expected increase by its index of U.S. manufacturing activity.

The ISM said its purchasing managers index jumped to 53.2 in June from 51.3 in May, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 51.5.

With the bigger than expected increase, the ISM's manufacturing index rose to its highest level since reaching 53.3 in February of 2015.

Rob Carnell, Chief International Economist at ING Commercial Banking, said the number is consistent with a decent but not amazing pace of manufacturing growth.

The subsequent pullback by the markets may partly reflect profit taking on the heels of the strong upward move seen in recent days. Some traders may be cashing on the substantial gains ahead of the long Fourth of July weekend.

Among individual stocks, shares of Array BioPharma (ARRY) have moved notably higher after the biopharmaceutical company submitted a New Drug Application to the FDA for binimetinib in patients with advanced NRAS-mutant melanoma.

Netflix is also posting a standout gain after Canaccord Genuity initiated coverage of the company's stock with a Buy rating and a price target of $120.

On the other hand, shares of Micron Technology (MU) have moved sharply lower after the memory chip maker reported a narrower than expected third quarter loss but on weaker than expected revenues.

Natural gas pipeline company Williams has also moved to the downside after announcing that Frank T. MacInnis is stepping down as Chairman due to personal reasons.

Sector News

Gold stocks are turning in some of the market's best performances on the day, resulting in a 3 percent jump by the NYSE Arca Gold Bugs Index. With the gain, the index has reached its best intraday level in well over two years.

The strength among gold stocks comes amid a sharp increase by the price of the precious metal, with gold for August delivery surging up $18.30 to $1,338.90 an ounce.

Significant strength is also visible among steel stocks, as reflected by the 1.9 percent gain being posted by the NYSE Arca Steel Index. U.S. Steel (X), Allegheny Technologies (ATI), and ArcelorMittal (MT) are posting standout gains.

Energy stocks are also seeing considerable strength, moving higher along with the price of crude oil. Crude for August delivery is climbing $0.05 to $48.38 a barrel.

Biotechnology, transportation, and internet stocks are also seeing notable strength, while weakness is visible among electronic storage stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.7 percent, while China's Shanghai Composite Index inched up by 0.1 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index surged up by 1.1 percent, the German DAX Index jumped by 1 percent and the French CAC 40 Index climbed by 0.9 percent.

In the bond market, treasuries have pulled back well off their best levels but continue to see modest strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.5 basis points at 1.463 percent.