Stocks shake off recovery jitters
The economy is slowing, the Fed is cautious about the recovery and the world's biggest chipmaker is lowering its sales forecast. But stocks rallied more than 1 percent Friday.
The Dow Jones industrial average surged 165 points, or 1.7 percent, the S&P 500 jumped 17 points, or 1.7 percent, and the Nasdaq composite rose 35 points, or 1.7 percent.
While finishing in positive territory for the day, the major indexes ended in
the red for the week.
"The market is starving for something decent to look at," said Rob Russell, president of financial planning firm Russell & Company.
Second-quarter GDP, the broadest measure of economic activity, was revised sharply lower, but was less drastic than forecast. Meanwhile, Fed Chairman Ben Bernanke said the recovery is sputtering, but stressed that the Fed has the tools to ensure continued growth.
Treasury yields rise as investors shift gears
Investors shifted away from Treasurys on Friday, after a better-than-expected report on U.S. economic growth and comments from the Federal Reserve chairman.
The yield on the benchmark 10-year note rose to 2.64 percent from 2.49 percent late Thursday. After falling to a 19-month low earlier this week, the 10-year yield ended the week just about where it started.
The yield on the 2-year note was 0.57 percent, up from a record low near 0.5 percent, while the 5-year note yielded 1.5 percent. The 30-year bond yielded 3.69 percent, up from 3.52 percent. Treasury prices and yields move in opposite directions.
Investors regained some appetite for riskier assets such as stocks, after government figures showing the U.S. economic growth slowed sharply in the second-quarter came in modestly better than many economists had expected.
Because the revision was not quite as severe as expected, stocks rallied
as investors placed bets that the recovery was still on track, albeit a slow
- CNNMoney.com reporters Blake Ellis and Ben Rooney contributed to this report.