Following the pullback seen in the previous session, stocks moved back to the upside during trading on Friday. The major averages fluctuated in morning trading but climbed more firmly into positive territory in the afternoon.
The major averages moved higher going into the close, with the Dow and the S&P 500 reaching new highs for the session. The Dow rose 216.30 points or 0.6 percent at 35,970.99, the Nasdaq climbed 113.23 points or 0.7 percent to 15,630.60 and the S&P 500 jumped 44.57 points or 1 percent to 4,712.02.
The advance on the day capped off a strong week for the major averages. The Dow spiked by 4 percent, while the S&P 500 and the Nasdaq surged up by 3.8 percent and 3.6 percent, respectively.
The strength on Wall Street came even after the Labor Department released a report showing U.S. consumer prices surged at the fastest annual rate of in nearly 40 years in November.
The report showed the annual rate of growth in consumer prices accelerated to 6.8 percent in November from 6.2 percent in October, reflecting the biggest jump since June of 1982.
Core consumer prices, which exclude food and energy prices, were up by 4.9 percent compared to the same month a year ago, showing the biggest annual increase since June of 1991.
The faster annual growth came as consumer prices climbed by 0.8 percent in November following a 0.9 percent advance in October. Economists had expected consumer prices to increase by 0.7 percent.
Core consumer prices rose by 0.5 percent in November after climbing by 0.6 percent in October. The increase in core prices matched economist estimates.
While the elevated rate of inflation may lead the Federal Reserve to accelerate the pace of tapering its asset purchases next week, traders seemed relieved that the price growth was not even faster.
A separate report from the University of Michigan showed consumer sentiment in the U.S. unexpectedly improved in early December.
The report said the consumer sentiment index climbed to 70.4 in December after dropping to a ten-year low of 67.4 in November. The rebound surprised economists, who had expected the index to edge down to 67.1.
Software stocks turned in some of the market’s best performances on the day, driving the Dow Jones U.S. Software Index up by 2.4 percent.
Oracle (ORCL) is leading the sector higher, soaring by 15.6 percent after the business software giant reported better than expected fiscal second quarter results and announced a $10 billion increase in its share repurchase program.
Significant strength also emerged among oil service stocks, as reflected by the 1.7 percent gain posted by the Philadelphia Oil Service Index.
The strength in the oil service sector came amid an increase by the price of crude oil, with crude for January delivery climbing $0.73 to $71.67 a barrel.
Housing and networking stocks also turned in strong performances on the day, while airline and biotechnology stocks showed notable moves to the downside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slumped by 1 percent, while China’s Shanghai Composite Index dipped by 0.2 percent.
The major European markets also moved to the downside over the course of the session. While the U.K.’s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index and the German DAX Index edged down by 0.2 percent and 0.1 percent, respectively.
In the bond market, treasuries showed a lack of direction as the day progressed before closing roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 1.489 percent.
The Fed’s monetary policy meeting is likely to be in the spotlight next week, overshadowing a slew of reports on producer price inflation, import and export prices, retail sales, housing starts and industrial production.