Stock Gains Deflate but On Track for Weekly Rise

Stock gains deflate by the final hour of trading Friday, though markets remain on track for a weekly gain of more than 3%.
By Keris Alison Lahiff ,

Stock gains had deflated by the final hour of trading Friday, though markets remained on track for a weekly gain of more than 3%.

The Dow Jones Industrial Average rose 0.38%, the S&P 500 added 0.27%, and the Nasdaq gained 0.47%.

Nike (NKE) - Get Report shares jumped 4.6% after announcing a 2-for-1 stock split and increasing its quarterly dividend payment by 14%. The athletics wear company also was authorized to begin a $12 billion buyback plan at the end of fiscal 2016.

Alphabet (GOOGL) - Get Report added more than 2% on signs it is beefing up its cloud-computing business after hiring industry veteran Diane Greene. Greene, a co-founder of IT company VMWare, will head a new unit combining Google's cloud and apps businesses.

U.S. stocks were also higher amid monetary policy talk from the European Central Bank and the Federal Reserve. Markets have been relieved that international bodies appear ready to do what it takes to stimulate growth, while the uncertainty has dissipated over whether the Fed will make its move off of crises-level rates soon.

The European Central Bank will act quickly to boost inflation, President Mario Draghi said on Friday, in a sign that the bank could introduce additional stimulus. Draghi said that the ECB could tinker with its current bond-buying program and deposit rate as possible ways to prevent inflation from falling below a target 2%. The ECB is set to meet on Dec. 3.

The ECB's U.S. counterpart, the Fed, has "done everything [it] can to avoid surprising the markets and governments" ahead of an inevitable move off of crises-level interest rates, Fed Vice Chairman Stanley Fischer said on Thursday in a speech in San Francisco. Fischer also reiterated that the central bank has not made a decision yet as to whether it will make its move in December, and said the Fed will continue to assess the data. Markets are currently pricing in an approximate two-in-three chance of a December hike.

Inflation will likely move up to its 2% target rate soon, St. Louis Fed President James Bullard said on Friday. Bullard, a voting member on the Federal Open Market Committee in 2016, said the Fed's inflation target will likely be met by the end of next year if oil prices stabilize and other prices continue to increase.

Tesla (TSLA) - Get Report tumbled 1.5% in afternoon trading on news the company is recalling all 90,000 Model S sedans to assess a possible defect involving seat belts. The automaker said the cost of the recall would be "immaterial."

Cisco (CSCO) - Get Report shares added nearly 1% after the tech giant announced it would buy Acano, a privately held video-conferencing software company. Cisco said it had agreed to purchase the London-based company for $700 million in cash.

Abercrombie & Fitch (ANF) - Get Report surged 18% after doubling quarterly profit on fewer promotional discounts. Sales declined 4%, largely due to currency exchange. Foot Locker (FL) - Get Report spiked 8% after beating analysts' quarterly estimates thanks to a quarterly comparable-store sales increase of 8.7%.

Gap (GPS) - Get Report shares fell nearly 2% after lowering full-year forecasts. The company expects full-year earnings between $2.38 and $2.42 a share, down from a previous forecasts of at least $2.75. The retailer also reported a third-quarter sales decline driven by a drop in same-store sales at Gap and Banana Republic stores.

Splunk (SPLK) - Get Report added 1.5% after reporting third-quarter earnings of 5 cents a share, 4 cents above estimates. The enterprise software developer also announced that its CEO of seven years, Godfrey Sullivan, was stepping down and that Doug Merritt, its sales chief, would assume the position.

Williams-Sonoma (WSM) - Get Report fell 3.5% despite a better-than-expected quarter. The homewares retailer earned 77 cents a share in its third quarter, a nickel above forecasts. Sales climbed 8% to $1.23 billion, coming in a nudge above estimates.

Souring the market mood Friday was a terrorist attack at the Radisson Blu hotel in Mali's capital. Security forces have reportedly launched a counterassault on the hotel, where officials say gunmen took dozens of hostages and killed at least three people, CNN reported.

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