U.S. Stocks Move Sharply Higher On Inflation Data, Upbeat Earnings News

(RTTNews) - Following the rebound seen in the previous session, stocks have shown another strong move to the upside during trading on Friday. With the continued upward move, the major averages have reached new record intraday highs.

In recent trading, the major averages have reached new highs for the session. The Dow is up 518.75 points or 1.1 percent at 47,253.36, the Nasdaq is up 295.55 points or 1.3 percent at 23,237.35 and the S&P 500 I sup 67.68 points or 1.0 percent at 6,806.12.

The rally on Wall Street comes following the release of a closely watched report on consumer price inflation that has increased confidence the Federal Reserve will continue cutting interest rates in the coming months.

While most U.S. economic data has been postponed indefinitely due to the ongoing government shutdown, the Labor Department released a report this morning showing consumer prices increased by slightly less than expected in the month of September.

The Labor Department said its consumer price index rose by 0.3 percent in September after climbing by 0.4 percent in August. Economists had expected consumer prices to rise by another 0.4 percent.

The report also said the annual rate of growth by consumer prices ticked up to 3.0 percent in September from 2.9 percent in August, although that was slower than the 3.1 percent jump expected by economists.

Excluding food and energy prices, the core consumer price index crept up by 0.2 percent in September after rising by 0.3 percent in August. Core consumer prices were expected to increase by another 0.3 percent.

The Labor Department also said the annual rate of growth by core consumer prices slowed to 3.0 percent in September from 3.1 percent August. Economists had expected the pace of growth to remain unchanged.

"Consumer inflation came in cooler in September, reinforcing expectations that the Fed will cut rates again at next week's policy meeting," said Nationwide Chief Economist Kathy Bostjancic.

She added, "We remain of the view that the Fed will cut the fed fund rate by another 50bps by year-end as the weakening in the labor market outweighs concerns about moderately higher inflation stemming mostly from the tariffs."

Buying interest has also been generated in reaction to upbeat earnings news from big-name companies like Ford (F), Procter & Gamble (PG) and Intel (INTC).

Shares of are surging by 10.3 percent after the auto giant reported third quarter results that exceeded analyst estimates on both the top and bottom lines.

Procter & Gamble is also seeing notable strength after the consumer products giant reported fiscal first quarter results that exceeded expectations.

Meanwhile, shares of Intel have pulled back well off their early highs but remain up by 0.9 percent after the semiconductor giant reported better than expected third quarter sales.

Sector News

Computer hardware stocks are extending the rally seen in the previous session, with the NYSE Arca Computer Hardware Index surging by 3.5 percent to a new record intraday high.

Substantial strength is also visible among banking stocks, as reflected by the 2.2 percent jump by the KBW Bank Index.

Semiconductor, airline and brokerage stocks are also seeing considerable strength, while gold stocks are bucking the uptrend amid a modest decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index jumped by 1.4 percent, while South Korea's Kospi surged by 2.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index is up by 0.4 percent, the German DAX Index is just below the unchanged line and the French CAC 40 Index is down by 0.2 percent.

In the bond market, treasuries have shown a lack of direction over the course of the session. Currently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 3.995 percent.