At noon, all three of the main indexes were up more than 1 percent. Tthe Standard Poor’s 500-stock index was up 14.65 points, after dipping briefly into negative territory. The Dow Jones industrial average was up about 187 points, and the Nasdaq rose 27.26.
If Friday’s gains are sustained, it could turn around the week’s overall trend, which had the broader market as measured by the S.P. 500 down by just over 2 percent at the end of trading Thursday.
American stock markets have been wildly volatile in the past four trading sessions, with alternating days of collapsing and then sharply rising prices. The mood has swung between speculation about worries over the economy and a renewed financial crisis, and confidence that banks are healthy and corporate profits strong.
As the week drew to a close, investors sifted through new data on the economy, including insights into consumer behavior, a crucial element in trying to gauge the pace of the recovery.
The Commerce Department said retail sales for July rose 0.5 percent. Without the volatile automobile and gas components, sales firmed 0.3 percent. The figures included several revisions, but they suggested there was some spending momentum in the second quarter and the beginning of the current quarter, at least.
But another piece of data that is indicative of where the market could swing was a survey by the University of Michigan that showed consumer sentiment dipped in August, registering 54.9 on its index, which was a reading lower than during the crisis of November 2008.
“Clearly, recent financial market turmoil has weighed heavily on sentiment, which was already under pressure from a dysfunctional political arena and the longer-term issue of an ailing labor market,” said Joshua Shapiro, the chief United States economist for MFR, in a research note.
Industrial stocks led the way on the S.P. 500, with General Electric up 2.55 percent. Financial stocks showed slight gains of less than half a percent.
The “fear” index, or VIX, which is a measure of volatility in the market, declined to 34.23, its lowest point so far this week.
United States benchmark 10-year Treasury yields were lower, to 2.25 percent from 2.34 percent on Thursday.The gain in stocks came well after investors had digested the latest economic data. Timothy A. Hoyle, director of research for Haverford Investments, said that the markets took a step down in early trading when the index report was released, but that the figure was not unexpected considering recent bad economic data and some of the developments in financial markets.
Speaking about the market on Friday, he said: “Everyone is suffering from volatility fatigue.”
“We are stuck in a trading range until we have a credible backstop in Europe,” he said. “The market is extremely cheap but there is a lack of confidence in forward earnings estimates.”American stocks picked up the pace from Europe, where markets got a lift from the imposition of temporary bans on negative bets against financial stocks in four countries. The Euro Stoxx 50 index of euro zone blue chips was up more than 4 percent, and the FTSE 100 index in London was up 3.04 percent. The CAC 40 index in Paris was also up 4.02 percent, and the DAX in Frankfurt was up 3.45 percent. Asian stocks had a lackluster trading day.
Bans on so-called short-selling of bank shares took effect in France, Italy, Spain and Belgium Friday, giving some relief to pressured bank shares. France, Italy and Spain said the bans would be in effect for 15 days, while Belgium did not set an expiration date. The Stoxx Europe 600 Banks index was up 2.8 percent in afternoon trading.
Germany said it supported the move by its neighbors and would push for other countries to adopt its own ban on so-called naked short-selling, which involves selling securities without having the underlying assets, in the hope of buying them back at a lower price.
“We are advocating a wide-reaching ban on naked short-selling of stocks, sovereign bonds, and credit default swaps,” a German Finance Ministry spokesman, Martin Kotthaus, told Reuters in Berlin. “Only this way can destructive speculation be countered convincingly.”
Article source: http://www.nytimes.com/2011/08/13/business/daily-stock-market-activity.html?partner=rss&emc=rss
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