Stocks have shown wild swings over the course of the trading session on Friday, with the major averages bouncing back and forth across the unchanged line following the sell-off seen during the previous session.
Currently, the major averages are all in positive territory. The Dow is up 324.75 points or 1 percent at 34,168.67, the Nasdaq is up 31.67 points or 0.2 percent at 14,480.26 and the S&P 500 is up 28.36 points or 0.7 percent at 4,335.90.
The volatility on Wall Street may reflect uncertainty about the near-term outlook for the markets following the steep drop seen in the month of September.
For September, the Dow tumbled by 4.3 percent, while the Nasdaq and the S&P 500 plummeted by 5.3 percent and 4.8 percent, respectively. The S&P 500 saw its worst month since the early days of the coronavirus pandemic.
While some traders have looked to go bargain hunting, picking up stocks at relatively reduced levels, others remain concerned about inflation and the Federal Reserve scaling back its asset purchases.
Adding to the mixed sentiment, a report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. manufacturing activity but noted persistent supply chain issues.
The ISM said is manufacturing PMI crept up to 61.1 in September from 59.9 in August, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to edge down to 59.6.
“Manufacturing performed well for the 16th straight month, with demand, consumption and inputs registering month-over-month growth, in spite of continuing unprecedented obstacles and ever-increasing demand,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, “Panelists’ companies and their supply chains continue to struggle to meet demand due to difficulties in hiring and a clear cycle of labor turnover, as workers opt for more attractive job opportunities.”
Airline stocks have shown a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 4.7 percent.
Southwest Airlines (LUV) is posting a strong gain after JPMorgan upgraded its rating on the company’s stock to Overweight from Neutral.
Significant strength is also visible among energy stocks, which are moving higher along with the price of crude oil. Crude for November delivery is rising $0.45 to $75.48 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 2.3 percent, the NYSE Arca Oil Index is up by 2.2 percent and the NYSE Arca Natural Gas Index is up by 1.8 percent.
Chemical, financial, and software stocks are also seeing notable strength in afternoon trading, contributing to the advance currently being shown by the broader markets.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday, with markets in China closed for a holiday. Japan’s Nikkei 225 Index plummeted by 2.3 percent, while Australia’s S&P/ASX 200 Index tumbled by 2 percent.
The major European markets also moved to the downside on the day. While the French CAC 40 Index closed just below the unchanged line, the German DAX Index and the U.K.’s FTSE 100 Index slid 0.7 percent and 0.8 percent, respectively.
In the bond market, treasuries have moved notably higher, extending the uptick seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.8 basis points at 1.481 percent.
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