New York, London: US stocks rose in early trade on Friday as the rally that began mid-day Thursday picked up momentum following strong trading in Europe and some solid earnings reports at home.
About 35 minutes into trade, the Dow Jones Industrial Average stood at 16,309.95, up 191.95 points (1.19 per cent).
The broad-based S&P 500 gained 22.26 (1.20 per cent) to 1,885.02, while the tech-rich Nasdaq Composite Index jumped 53.84 (1.28 per cent) to 4,271.23.
European stocks were on track for their steepest daily rise in over a year on Friday as stronger US data helped fuel a rebound from recent, sharp losses and worries about Greece’s political stability eased.
At 1429 GMT, the pan-European FTSEurofirst 300 index was up 2.4 per cent at 1,276.21 points, setting it on track for its biggest daily bounce since July 4, 2013. Volume was 30 per cent higher than the index’s full day average for the past three months.
The FTSEurofirst extended gains in the afternoon after a widely followed survey showed US consumer sentiment rose in October to the highest in more than seven years, boosted by views on personal finances and the national economy.
The index had fallen nearly 12 per cent over the previous month, as a raft of weak Eurozone macro economic data raised the spectre of a new recession in the region as the Federal Reserve winds down its asset purchase programme and the European Central Bank has yet to start its own.
“Valuations have improved after the sell-off,” said Fadi Zaher, who helps to manage assets worth €7.5 billion (Dh35 billion, $9.5 billion) at Kleinwort Benson.
Thursday’s performance suggests the sell-off “is at, or near, an exhaustion point,” said Patrick O’Hare, analyst at Briefing.com.
A Lipper poll of 109 US-domiciled funds invested in European stocks, which include exchange-traded funds’ (ETFs) holdings, shows net outflows of $1.3 billion in the seven days to Oct. 15, the biggest weekly redemptions since Lipper started to monitor the data in 1992.
“We think sentiment and fund flow have exaggerated the recent sell-off, and although the fundamentals may have worsened a bit, the equity market has overshot,” Barclays Capital analysts said.