By CCN Markets: The Dow and broader U.S. stock market advanced Friday, as traders looked past an ominous recession warning…
By CCN Markets: The Dow and broader U.S. stock market advanced Friday, as traders looked past an ominous recession warning from the government bond market.
The broad S&P 500 Index of large-cap stocks gained 1.4% to 2,886.80. All 11 primary sectors contributed to the rally, with financials and industrials leading the pack.
Meanwhile, the technology-focused Nasdaq Composite Index rose 1.7% to 7,896.09.
Stocks remain on track for modest weekly declines after the yield curve everybody is worried about flashed its first recession warning since before the financial crisis.
U.S. Treasury yields recovered on Friday, but continued near multi-year lows. The yield on the benchmark 10-year U.S. Treasury note reached a high of 1.59% after crashing below 1.5% earlier in the week.
Recession fears were magnified this week after Germany became the second major European economy to slide into negative growth during the second quarter. Germany's gross domestic product (GDP) contracted 0.1% quarter-on-quarter, joining the United Kingdom in negative-growth territory.
As an export-driven economy, Germany's manufacturing sector is being weighed down by softer Chinese demand. Chinese factory output is also slowing, as evidenced by this week's dismal manufacturing data.
Chinese industrial production grew just 4.8% annually in July, down sharply from 6.3%, the National Bureau of Statistics reported Wednesday. That was the worst reading since 2002.