U.S. Stocks Moving Sharply Higher After Early Volatility

(RTTNews) - After showing a lack of direction early in the session, stocks have moved sharply higher over the course of the trading day on Friday. The major averages have all climbed firmly into positive territory after spending the morning bouncing back and forth across the unchanged line.

Currently, the major averages are just off their highs of the session. The Dow is up 746.23 points or 1.6 percent at 46,498.49, the Nasdaq is up 382.94 points or 1.7 percent at 22,460.99 and the S&P 500 is up 107.43 points or 1.6 percent at 6,646.19.

The strength that has emerged on Wall Street may partly reflect renewed optimism about the Federal Reserve lowering interest rates at its next monetary policy meeting in December.

CME Group's FedWatch Tool indicates the chances of a quarter point rate cut at the Fed's December meeting have soared to 69.7 percent from just 39.1 percent on Thursday.

The increased bets on a rate cut next month come following dovish remarks by New York Federal Reserve President John Williams.

During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being "modestly restrictive" and said he sees "room for a further adjustment" to rates in the near term.

However, it is worth noting that the minutes of the latest Fed meeting revealed officials have "strongly differing views" about whether to continue cutting rates in December.

Potentially adding to the optimism about the outlook for interest rates, the University of Michigan released a report showing decreases by both year-ahead inflation and long-run inflation expectations in November.

The advance by stocks may also reflected bargain hunting on the final day of a difficult week for the markets, which has seen the Nasdaq and the S&P 500 tumble to their lowest levels in over two months.

Sector News

Housing stocks are turning in some of the market's best performances on the day, with the Philadelphia Housing Sector Index soaring by 4.4 percent.

Substantial strength is also visible among airline stocks, as reflected by the 3.7 percent surge by the NYSE Arca Airline Index.

Biotechnology, healthcare and pharmaceutical stocks have also shown strong moves to the upside, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both tumbled by 2.4 percent, while South Korea's Kospi nosedived by 3.8 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index slid by 0.8 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.'s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price is down by 3.1 basis points at 4.075 percent.