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Dow Secures 265 Point Rally But Crippling Recession Fears Linger

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.

Dow Rallies; S&P 500, Nasdaq Follow

All of Wall Street's major indexes reported gains Friday, mirroring a strong pre-market for Dow futures. The Dow Jones Industrial Average rallied 266.48 points, or 1%, to 25,845.87.

Dow Jones Industrial Average ends a volatile week on firm footing. | Source: Yahoo Finance.

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.

Recession Fears Grip Wall Street

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.

The 10-year U.S. Treasury yield has been in perpetual decline all year. | Source: CNBC.

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.

Click here for a real-time Dow Jones Industrial Average Chart.

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Sam Bourgi @hsbourgi

Financial Editor to CCN Markets, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi. Sam is based in Ontario, Canada and can be contacted at sam.bourgi@ccn.com

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