- Stocks climbed on Friday after a choppy week of trading amid a bond-market rally and hopes of new economic stimulus across Europe.
- German news-magazine Der Spiegel reported Germany plans to engage in deficit spending should the country fall into a recession, while an official from the European Central Bank recently said monetary stimulus in the region would exceed expectations.
- Bonds yields rebounded from a buying spree on Thursday, with the yield on 30-year Treasuries bouncing back after falling below 2% for the first time.
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Stocks rose on Friday after a turbulent week of trading as the potential of new economic stimulus across Europe slowed a torrid bond-market rally.
The yield on 30-year Treasurys recovered from a historic low after falling below 2% on Thursday. Der Spiegel, a German news magazine, reported Germany plans to use deficit spending to boost growth in the event of a recession.
The nation said earlier this week that its economy shrank 1% in the second quarter, adding onto existing concerns of a global economic slowdown.
In addition, a top official from the European Central Bank said on Thurdsay that a new stimulus package being announced at its September meeting should surpass investor expectations. The bank’s plan is expected to include a "substantial and sufficient" bond buying program as well interest rate cuts, according to the Wall Street Journal.
The prospect of a new stimulus packaged in Europe appeared to sooth some anxiety over a growing number of signs the world economy is falling into a recession.
Here’s a look at the major indexes as of the 4 p.m. close on Friday:
- The S&P 500 climbed 1.44%, to 2,888.68.
- The Dow Jones Industrial Average rose 1.20%, to 25,886.01.
- The Nasdaq Composite jumped 1.67%, to 7,895.99.
General Electric’s stock rebounded 10% on Friday after tanking as much as 14% on Thursday. The losses yesterday occurred after famed whistleblower Harry Markopolos accused the company of committing accounting fraud. The company’s stock bounced back after Larry Clup, GE’s chief executive officer, pushed back against Markopolos’s claims and purchased about $2 million in stock.
Strong earnings from Nvidia sent shares climbing 7% and sparked a rally in chip stocks. The company posted revenue and earnings per share that beat Wall Street expectations despite sales falling by about 17%. AMD jumped 5% on the news, while Micron Technology and Qualcomm rose roughly 3% apiece.
Within the S&P 500, these were the largest gainers:
And the largest decliners:
Every sector within the S&P 500 rose on Friday. Financials, industrials, and technology stocks led the gains, climbing more than 1.8%.
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