US Stocks look to bounce back, with earnings in focus

US stocks have surged higher as strong Google earnings and a large pharmaceutical deal offset worries about worsening international crises in Ukraine and Gaza.

The Dow Jones Industrial Average rose 123.37 points, or 0.73 percent, to 17,100.18. The S&P 500 jumped 20.10 points, or 1.03 percent, to 1,978.22. The Nasdaq Composite Index surged 68.70 points, or 1.57 percent, to 4,432.15.

After the rally, the blue-chip Dow and the S&P 500 recouped most of Thursday’s losses, while the tech-rich Nasdaq wiped out all losses the prior day, logging the best day since early May.

On the previous trading day, the U.S. stock market took a toll, as investors turned risk averse and tried to flee from risky assets to safe haven such as gold, after news that the Malaysia Airlines flight MH17 with 298 people on board crashed in the war- torn eastern Ukraine near the Russian border Thursday.

However, capital flows reversed in the day, pushing the major indices higher, as geopolitical uncertainties in Ukraine were contained so far.

The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, receded 17.06 percent to end at 12.06.

For the week, the three indices closed in positive territory, up 0.9 percent, 0.5 percent, and 0.4 percent, respectively, as market sentiment had been boosted by generally upbeat corporate earnings as well as jubilant mergers and acquisitions.

U.S. drug maker AbbVie on Friday announced that it had reached a deal to acquire Dublin-based Shire for approximately 54 billion U.S. dollars. The former’s shares went up 2.60 percent to 54.91 dollars apiece.

Economic data came out negative in the day but failed to push major indices lower.

The Reuter/University of Michigan’s preliminary reading for U.S. consumer sentiment index in July dropped to 81.3 from 82.5 of the prior month, also falling short of market consensus of 83.

The Conference Board Leading Economic Index for the United States advanced 0.3 percent in June to 102.2, following a 0.7 percent increase in May, also trailing market estimates.

In other markets, the U.S. dollar recovered from losses of the previous session against most major currencies Friday despite lower-than-expected U.S. economic data.

In late New York trading, the euro fell to 1.3526 dollars from 1.3527 dollars in the previous session, while the U.S. dollar bought 101.37 Japanese yen, higher than 101.31 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange fell as profit-taking caused a slip following Thursday’s surge on the crash of an ill-fated Malaysia Airlines passenger flight with 298 people aboard.

The most active gold contract for August delivery fell 7.5 dollars, or 0.57 percent, to settle at 1,309.4 dollars per ounce.

Crude prices dropped on profit-taking. Light, sweet crude for August delivery moved down 6 cents to settle at 103.13 dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery lost 65 cents to close at 107.24 dollars a barrel.

Agencies/Canadajournal