Stocks End Higher as Bond Easing Tempers Recession Fears

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished higher Friday as easing bond prices sent investors back to the markets in search of bargains.
  • Shares of Nvidia (NVDA - Get Report) surged after the chipmaker posted stronger-than-expected second-quarter earnings. Nvidia is Real Money's Stock of the Day.
  • Deere (DE - Get Report) shares tumbled after the farm and construction equipment maker missed Wall Street's third-quarter earnings expectations and lowered its full-year sales and profit forecast.

Wall Street Overview

Stocks finished higher Friday for the second straight day but posted a third straight weekly decline as easing bond prices relieved concerns about a recession and had investors looking for bargains to close out a wild week.

The Dow Jones Industrial Average rose 306 points, or 1.20%, to end at 25,886, the S&P 500 advanced 1.44%, while the Nasdaq rose 1.67%. The Dow lost 1.5% for the week and the S&P 500 was off 1%.

The 10-year Treasury yield was recently up 0.02 to 1.547%.

Bloomberg News reported that President Donald Trump reportedly held a call on Wednesday about the plunging stock market with the CEOs of three major U.S. banks. Trump spoke with JPMorgan Chase (JPM - Get Report) CEO Jamie Dimon, Bank of America's (BAC - Get Report) Brian Moynihan, and Citigroup's (C - Get Report) Michael Corbat, Bloomberg said, citing people with knowledge of the situation, and asked about the health of U.S. consumer.

The three chief executives told told Trump that while consumers were doing well, they would do better if such issues as the U.S.-China trade war resolved.

"Asian and European equities pushed higher overnight while Treasury yields rebounded after hitting multi-year and even all-time lows across the curve this week," said Gorilla Trades strategist Ken Berman. "All of the key risk-on sectors are up by more than 1%, so while (Thursday's) bounce was weak, (Friday's) broad rally could be the start of a larger-scale move."

3M (MMM - Get Report)  helped lead the Dow's advance Friday, followed by JPMorgan Chase (JPM - Get Report)  and Apple (AAPL - Get Report) .

The ongoing U.S.-China trade war remains top of investors' minds. Comments Thursday from President Donald Trump during a visit to Morristown, N.J., were also cited as adding to Friday's positive tone as he repeated his assertion that the U.S. was having "very good discussions with China" and that he plans to speak with China President Xi Jinping in the near future.
 
"They very much want to make a deal," Trump said. "I think the longer it goes the stronger we get ... I have a feeling (the current trade war) is going to go fairly short."
 
Trump agreed earlier this week to delay tariffs on some key products from China until Dec. 15. China said it would counter the latest U.S. tariffs on $300 billion of Chinese goods but called on the United States to meet it halfway on a potential trade deal. Trump said he didn't think Beijing would retaliate for the U.S. tariffs.
 
"September, the meeting is still on as I understand it, but I think more importantly than September, we're talking by phone, and we're having very productive talks," Trump said.
 
Shares of Palo Alto Networks ( PANW - Get Report) fell 7% on a key sales executive's planned departure.
 
Shares of Nvidia ( NVDA - Get Report) surged 7.3% to $159.56 after the after the chipmaker posted stronger-than-expected second-quarter earnings as videogame revenue offset an ongoing slide in data center sales. Nvidia is Real Money's Stock of the Day.

Deere  ( DE - Get Report)  rose 3.8% to $149.20 even though the farm and construction equipment maker missed Wall Street's third-quarter earnings expectations and lowered its full-year sales and profit forecast.
 
Shares of Applied Materials ( AMAT - Get Report)  fell 1.1% to $46.63 following one analyst downgrade and another that kept a hold rating on the chip gear maker's stock.While Applied Materials beat Wall Street expectations, analysts at Craig-Hallum cut their price target to $46 from $50, while Deutsche Bank held steady at $47.
 
General Electric ( GE - Get Report) shares, which had its worst day in 11 years on Thursday, lit up, rising 9.7% to $8.78 after CEO Larry Culp purchased $2 million worth of shares in the industrial giant following reports that its accounting tactics were targeted by the whistleblower who helped bring down Bernie Madoff's Ponzi scheme.
 
Shares of Biggs & Stratton ( BGG - Get Report) were rebounding, climbing 5.2% to $4.83, one day after reporting weaker-than-expected fiscal-fourth-quarter results and announcing it would close a plant.
In economic news, U.S. housing permits surged faster` than expected in July to the highest level this year as falling interest rates helped to make new-home construction more affordable for builders and buyers alike.
 
In addition, the University of Michigan's consumer-sentiment index tumbled to a reading of 92.1 during the first half of August, the lowest since January. The reading was well below economists' average forecast for a reading of 97.4.
  
On the energy front, Brent crude contracts for October delivery, the global benchmark, were up 37 cents and selling at $58.60 per barrel, while West Texas Intermediate contracts for September, which are more tightly linked to U.S. gas prices, were 34 cents higher at $54.81 per barrel.
 
Nvidia, Apple, JPMorgan Chase, Citigroup and Cisco are holdings in Jim Cramer's Action Alerts PLUS member club . Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.