Stocks rallied on Friday to cap their best week of 2014, as the S&P 500 gained 4%, the Nasdaq gained 5%, and the Dow gained more than 2% after last week’s extremely volatile trading action. This week was also a busy week for tech earnings, with Apple, Amazon, Yahoo, and Microsoft all reporting their quarterly earnings, in addition to a number of Dow members including Caterpillar and 3M.
First, the scoreboard:
- Dow: 16,805.4, +127.5, (+0.8%)
- S&P 500: 1,964.6, +13.8, (+0.7%)
- Nasdaq: 4,483.7, +30.9, (+0.7%)
And now, the top stories on Friday:
1. Stocks rallied to finish the best week of 2014 for the markets, as the S&P 500 gained 5% and the Dow and Nasdaq also gained more than 2%. Stocks were bolstered by corporate earnings reports that the market, and as Rich Barry, floor governor at the NYSE wrote in an email this afternoon, “The market remains, ‘Strong like bull’… stocks are extending their rally because of solid earnings and because the U.S. is the absolute best economy in the world. Oh, and keep this point in mind: We are now entering a seasonally strong period of the year for stocks, and with most hedge funds underperforming the market this year, they are being forced to participate in the market as we get closer to year-end.”
2. The big loser on Friday was Amazon, which fell more than 8% after the online retailer reported a wider than expected quarterly loss on Thursday afternoon. And as Business Insider’s Jillian D’Onfro reported, the tone around Amazon has shifted significantly as analysts seem to be getting impatient with the company’s continued underperformance on the bottom line.
3. New home sales in September came in at an annualized selling rate of 467,000, which was up 0.2% from August’s revised number. August’s number, however was revised down sharply, to an annualized rate of 466,000 from 504,000, an initial number that blew away expectations. The report also showed that at the current rate of sales, the US housing supply stands at 5.3 months.
4. Sodastream shares were a big gainer on Friday, rising more than 15% after a report in trade publication Beverage Digest, citing a source, said that Pepsi would test flavored pods for Sodastream’s at-home soda brewing machine. In an emailed statement to Business Insider, Pepsi confirmed that it was participating in a trial with Sodastream, but added the the company is “one of several companies we’re talking to about potential ideas for the future.” Pepsi has long been rumoured as a potential suitor to buy Pepsi outright, but nothing has ever come of that speculation.
5. Ford reported earnings on Friday morning that beat expectations, but shares of the carmaker fell more than 4% as profits fell sharply from a year ago.
6. European banks are set to get results from the European Central Bank’s required stress test on Sunday, and a report from Bloomberg on Friday said that 25 banks are in-line to fail the test. Bloomberg also said about 10 of these banks will have to plug capital shortfalls, though which banks might be faced with this task were unknown.
7. The Russian ruble keeps falling against the dollar, with the falling price of oil and concerns that the country faces an imminent debt downgrade from ratings agencies continue to pressure the currency.
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