Inventories rebound sharply but remain on the way to the worst week since March

US stocks rebounded early on Friday, as equities rallied partially following a multi-day pullback that reduced the Dow Jones Industrial Average by about 1,400 points and left the Nasdaq on the brink of correction.

What is the performance of benchmarks?

The Dow Jones Industrial Average

DJIA, + 1.39%

jumped 362 points, or 1.4%, to 25,418. The average Blue Chips was on track to reach its highest percentage increase since August 16th.

The S & P 500

SPX, + 1.68%

jumped 41 points to 2,769, a gain of 1.5%. The benchmark was about to make its biggest gain since April, and it was about to break with a series of six-day losses, its longest retreat since a nine-day crash that It ended in November 2016. With the increase, it fell back above its 200-day moving average, a day after it closed below this level for the first time since April.

The 11 sectors of the S & P 500 all progressed early in the session.

The Nasdaq composite index

COMP + 2.42%

has climbed 153 points, or 2.1%, to 7,483. At current levels, it is expected to post its biggest gain since March.

For the week, the Dow is down 4.1%, the S & P lost 4.1% and the Nasdaq down 4%. All three are on the way to their biggest weekly decline since March. The Dow and S & P are on track for their third consecutive weekly loss, while the Nasdaq has fallen for two.

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What motivates the market?

While investors will closely monitor bond yields, the main catalyst for the recent decline, Friday will also mark the unofficial start of the third quarter earnings season. JPMorgan Chase & Co.

JPM, + 0.66%

Citigroup Inc.

C + 1.75%

and Wells Fargo & Co.

WFC + 0.39%

all reported, providing the first clues about how American companies are doing.

Third-quarter profits will be an important driver, according to information provided by companies in the coming weeks. According to FactSet, analysts expect earnings growth of about 19% and sales growth of 7%. Although this growth suggests an improvement in the economy, some fear that expectations may be too optimistic or that the quarter is only a record profit, as much of the earnings growth can be attributed to the tax bill adopted at the end of 2017.

This week's sell-off in the market has been triggered by the sudden rise in long-term interest rates since the end of September, especially long-term 10-year treasury bills.

TMUBMUSD10Y, + 0.52%

which has peaked in seven years higher than 3.26%.

However, the downward trend has accelerated amidst a wave of concerns over stock market valuations in an environment where the Federal Reserve is gradually raising interest rates in order to normalize its policies by relation to the levels of the crisis.

Higher returns increase the cost of borrowing for businesses. They also divert investments from stocks. However, the turmoil in the markets seemed to create a hedge demand for US bonds, as the 10-year note yield was down more than 6 basis points to 3.158%.

According to the latest economic data, US import prices rose 0.5% in September. Separately, an October Consumer Opinion Reading will be released at 10:00 am ET.

What do the analysts say?

"What investors need to make themselves understood is that even though the US economy is doing well and the prospect of rising interest rates has only emerged in recent weeks, Interest rate is not the end of the world, "said David Madden, market analyst at CMC Markets. "Higher interest rates are justified when the economy is strong."

What stocks are under discussion?

Financial stocks will probably be among the most active, given the reported results. Investors will also seek feedback on how companies plan to deal with rising rates.

JPMorgan posted third quarter earnings and sales ahead of expectations. The stock rose 0.8%.

Citigroup's third quarter results exceeded expectations, but sales were below expectations. The stock rose by 3.2%. Wells Fargo has reported adjusted earnings below expectations but above expectations. Shares gained 1.1%.

Overall, the sector grew 1.9%, although it experienced difficulties throughout 2018, recording a 3.7% decline since the beginning of the year. , compared with the 3.5% rise in the S & P 500 index.

PNC Financial Services Group Inc..

PNC -4.21%

reported higher adjusted earnings than analysts' forecasts and higher revenue than expected. Shares fell 3.8%.

Technology stocks will also remain at the center, with the sector having been one of the most affected by the week's crisis. Apple Inc..

AAPL, + 3.47%

increased by 2.6% while Google-parent Alphabet Inc.

GOOGL, + 2.47%

GOOG, + 2.75%

added 2.3%. Microsoft Corp.

MSFT, + 3.04%

increased by 1.8%.

Maybe the biggest problem of the week was Amazon.com Inc.

AMZN, + 4.57%

who lost 5.7% this week fell into correctional territory. The e-commerce giant jumped 3.6% on Friday.

Wedbush Securities upgraded Fitbit Inc.

IN SHAPE, + 6.22%

outperform. Shares rose 7.8%.

Where are the other markets traded?

Asian equities closed higher following the rebound in recent weakness, although they still recorded strong weekly losses. The main European indices were also higher on Friday.

Crude oil prices rose 0.8% while gold was down 0.2%. The US dollar index rose 0.3%.

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