US Stocks Rally on Durable Goods Orders Report
US stocks surged right from the start of Friday’s trading session and didn’t look back as investors were buoyed by a strong report on durable goods orders. The Dow Jones, S&P 500, and the Nasdaq all reached new 4-month highs and gold reached a new record-high, crossing the $1,300 per ounce mark. The Dow surged a whopping 200 points, a gain of almost 2 percent, and all 30 components of its blue-chip index posted gains.
The S&P 500 gained 23 points early in the day, or just over 2 percent, as 98 percent of its components edged up, including Nike, which reached a new record-high of nearly $82 a share. The Nasdaq also surged ahead, about 2.1 percent, as Apple and Amazon stocks both reached record-highs.
The stock surge has caused a number of analysts to ease their concerns about the possibility of a double-dip recession. Stocks had surged ahead early in the week before slumping back down in Wednesday and Thursday’s trading sessions. The better-than-expected report on durable goods orders released Friday appeared to provide investors the good news they needed to pick up activity.
Economists had expected orders on durable goods in August to decline by 1.4 percent, but the news was slightly better, as the decline was only 1.3 percent. The report covers orders on products meant to last at least three years, like automobiles or computers. New home sales, meanwhile, remained at the second-lowest level on record, as August sales projected to an annual rate of 288,000 units, just shy of expectations of economists. On Thursday, the National Association of Realtors released its report on existing home sales, which came in slightly higher than expected.
One of the nation’s largest homebuilders, KB Home reported a third quarter loss of 2 cents per share, which was welcome news after economists had projected a loss of 15 cents for the company. The company’s revenue rose almost 10 percent year-to-year, to just over $500 million. It’s the first year-to-year revenue gain in four years for KB Home, whose stock surged 3 percent in early trading.
After Thursday’s trading close, Nike reported a rise in quarterly revenue to more than $5 billion, an increase of about 8 percent over analysts forecasts. The rise was sparked by a rise in new orders of about 10 percent worldwide. The news drove Nike stock to an increase of nearly 3 percent.
Winners outnumbered losers on the New York Stock exchange by a ratio of more than five to one in heavy trading, as 650 million shares changed hands. On the Nasdaq, meanwhile, winners topped losers by four to one on trading volume of 1.4 billion shares.
In International trading, Britain’s FTSE 100 gained just shy of one percent, and Germany’s DAX and France’s CAC 40 each gained nearly 2 percent. Japan’s Nikkei index, meanwhile, lost just under 1 percent while Hong Kong’s Shanghai Composite and Hang Seng each posted small gains.
The 10-year US Treasury Note fell on the day, driving the yield up to 2.57 percent.