U.S. STOCKS, ECONOMIC NEWS
Financial stocks led a market surge after better-than-expected quarterly results from J.P. Morgan Chase boosted enthusiasm about earnings season and jolted the Dow from its longest slide in almost two months. The Dow Jones Industrial Average gained 203.82 points, or 1.6%, to 12777.09.
Floor trader at the New York Mercantile Exchange
The Standard & Poor's 500-stock index advanced 22.02 points, or 1.7%, to 1356.78. Both benchmarks eked out weekly gains amid a late-session advance, and each rose for the first time in seven sessions.
J.P. Morgan rose 6% to sit atop the Dow's leaderboard after the bank reported second-quarter earnings fell from a year ago, but results exceeded expectations.
Investors were watching to gauge the impact of soured outsize trading bets, which the company reported to be $4.4 billion in the second quarter.
Financial-sector stocks led all 10 of the S&P 500's sectors higher, with strong earnings by Wells Fargo lending support for the rally. Wells climbed 3.2% after the bank posted a 17% rise in second-quarter profit, as income in the bank's mortgage-banking business rose.
The Nasdaq Composite Index tacked on 42.28 points, or 1.5%, to 2908.47. Still, the technology-oriented benchmark shed 1% over the past five sessions, snapping its streak of five straight weekly gains.
Lexmark International dropped 16% after the maker of printing and imaging products lowered its outlook for second-quarter earnings, citing weaker-than-anticipated demand, particularly in Europe.
Rival Hewlett-Packard fell 1.9% and was the only Dow component to lose ground. Investors shrugged off July's preliminary reading for the Thomson Reuters/University of Michigan consumer-sentiment index, which was lower than expected.
In other U.S. economic news, wholesale prices in June rose for the first time in four months, exceeding expectations, as rising prices for light trucks and food more than offset falling energy costs.
Earlier, investors had looked to China for a reading on second-quarter growth. While gross domestic product growth of 7.6% was the slowest since 2009, the reading matched expectations, easing pressure across global markets.
In U.S. corporate news, Bridgepoint Education fell 25% after the company, which operates Ashford University and University of the Rockies, said Ashford is being monitored by a higher education commission to confirm that the university meets criteria for accreditation.
EUROPEAN STOCKS, BONDS
European stocks jumped and broke a two-day losing streak Friday as resource shares climbed after China's economic-growth rate met market expectations and as telecoms rallied on a sector upgrade.
The Stoxx Europe 600 index jumped 1.3% to 256.26, following two sessions mired in the red as investors worried about global growth prospects. The benchmark extended gains after a positive open on Wall Street. On a weekly basis, the Stoxx 600 rose 0.7%.
Among notable decliners, Peugeot SA tumbled 7.7%. Moody's Investors Service placed the French auto manufacturer's Ba1 credit rating under review for a downgrade.
In addition, Citigroup downgraded the European auto sector to neutral from overweight. Energy shares gained ground as oil prices rose following the Chinese growth data. BP PLC added 0.7% and BG Group PLC gained 1.3% in London. Miners also fueled gains there, with heavyweight BHP Billiton PLC rising 3.1% and Rio Tinto PLC up 3.2%.
The FTSE 100 index rose 1% to 5,666.13 and closed 0.1% higher for the week.
A successful Italian auction further helped steer stock markets into positive territory. The government managed to sell 3.5 billion euros ($4.3 billion) of new 3-year bonds at lower borrowing costs compared with a sale in June.
In the secondary markets, yields were rising, however, in the wake of Moody's cutting the government's bond rating to Baa2 from A3 with a negative outlook.
On the equities side, Italy's FTSE MIB index gained 1% to 13,714.68, but shed 0.1% for the week. Telecom Italia SpA rallied 4.6% after Citigroup lifted its rating on the telecom sector to neutral from underweight.
In Paris, France Telecom surged 5.6% and media and telecom firm Vivendi SA rose 3.5%, helping lift the CAC 40 index 1.5% to 3,180.81. The index closed the week with a 0.4% gain.
Germany's Deutsche Telekom AG jumped 5.7%, posting the biggest gain in the country's benchmark index, as Credit Suisse lifted its rating to neutral from underperform. The DAX 30 index added 2.2% to 6,557.10 in Frankfurt and was 2.3% higher for the week.
ASIA-PACIFIC STOCK MARKETS
Asian stocks climbed Friday as China reported second-quarter growth in line with expectations, dousing fears of a sharper-than-expected slowdown in the region's largest economy.
China's economy grew 7.6% in the April-June period, its slowest expansion since the first quarter of 2009, though the rise matched the median estimate of 15 economists polled earlier by Dow Jones Newswires.
Stocks in Hong Kong gained on the data, suggesting that much of the bad news was already priced in. The Hang Seng Index was 0.4% higher at 19092.63, led by commodity stocks.
China Coal Energy added 3.6% and Aluminum Corp of China rose 2%. The Hang Seng China Enterprises Index, which tracks Chinese companies listed in Hong Kong, gained 0.8% to 9237.04.
The Shanghai Composite was little moved by the growth data, finishing flat at 2185.90. South Korea's Kospi climbed 1.5% to 1812.89.
Japan's Nikkei was up just 0.05% at 8724.12, weighed down by a strengthened yen, but it was still enough for the benchmark to break a six-session losing streak.
The China growth figures brought a positive end to a week that was generally characterized by persistent selling, as other data from the country damaged sentiment.
Lower inflation was taken as a sign that the economy was slowing, and weak import growth as a signal that domestic demand is weakening.
Japan's Nikkei finished down 3.3% for the week, while Hong Kong's Hang Seng Index was 3.6% lower. In company news, Dentsu was the worst performer on the Nikkei, falling 7%, as investors reacted badly to an announcement made late Thursday that the advertising agency has agreed to buy U.K. media firm Aegis Group for $4.91 billion to create Asia's largest media group.
In Hong Kong, the city's largest real-estate developer, Sun Hung Kai Properties, was suspended from trading as news came out that Co-Chairmen Thomas and Raymond Kwok had been charged in connection with a high profile bribery investigation alongside former senior government official Rafael Hui.
Belle International Holdings was the best performer on the Hang Seng Index, climbing 4% after it posted same-store-sales growth of 10.5% for its footwear business and 5% for its sportswear business for the second quarter.
Base metals closed higher on the London Metal Exchange Friday, gaining in line with equities and the euro. At the close, LME three-month copper was 1.9% higher at $7,700 a metric ton.
Nickel gained the most, up 2.4% at $16,150/ton. Base metals moved higher in tandem with broader financial markets and the euro Friday, boosted by hopes of Chinese economic stimulus and well-received quarterly earnings in the banking sector.
Crude-oil futures rose 1.2% Friday following news the Obama administration had expanded sanctions on Iran. Front-month light sweet crude oil on the New York Mercantile Exchange settled at $87.10 a barrel, up $1.02.
Nymex oil futures were up 3.1% for the week. Front-month Brent futures Friday gained $1.33 a barrel to $102.40.
Analysts attributed Friday's price move to Thursday's news the Obama administration expanded sanctions on Iran and to increased evidence the Western policies are crimping Iranian oil output.
Gold stayed within a tight range after China's second-quarter growth report and a stronger euro prompted a morning rally. The most actively traded contract, for August delivery, gained 1.7%, or $26.70, to settle at $1,592.00 a troy ounce on the Comex division of the New York Mercantile Exchange. Compiled from MORRISON SECURITIES PTY. LTD.
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