Are investors looking for bargains? Today's rebound by the major U.S. stock indices following yesterday's rout suggests so.
Data showing the U.S. economy grew at its fastest pace in more than two years in the second quarter boosted the Dow Jones Industrial Average on Friday while news that Bill Gross is leaving Pimco shook the bond market.
The Dow climbed 167 points, or 0.99% to 17,113.15 with Nike (NKE) leading the charge, rising 12% to $89.50 after posting fiscal first-quarter financial results that blew away the Street's forecasts.
The S&P 500 rose 16.9 points, or 0.9% to 1,982.85, while the Nasdaq Composite jumped 45.5 points, or 1% to 4,512.
And the Russell 2000 climbed 9.1 points, or 0.8% to 1,119.33.
The yield on the 10-year Treasury note, meanwhile, rose 1% to 2.53%. Bond yields rise as prices fall.
The U.S. economy grew at a 4.6% annual pace in the second quarter. The increase in real GDP was revised up from 4.2% amid higher exports and business investment, the Commerce Department said Friday. The biggest gains came in business investment, which strategists say is a good sign for the economy.
Worries about the economy we one of several factors blamed for Thursday's stock market selloff, which led to the biggest one-day drop by the Dow since July
"Yesterday was more about terrorism and geopolitics," argues Brent Schutte, senior investment strategist at BMO Global Asset Management. "I do not buy the notion the economy is weakening. Look at today's GDP data.
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