By Dan Strumpf And Corrie Driebusch
U.S. stocks rebounded Friday, a day after major indexes posted
their largest one-day losses since late July.
The Dow Jones Industrial Average gained 86 points, or 0.5%, to
17031. The S&P 500 gained eight points, or 0.4%, to 1974. The
Nasdaq Composite Index advanced 22 points, or 0.5%, to 4488.
The Dow was buoyed by a rally in shares of Nike Inc., which
reported a 23% increase in quarterly profits. Shares of the
shoemaker surged 11% in morning trading.
Traders said bargain-hunters were cautiously stepping in
following Thursday's selloff, though volumes were relatively
subdued. On Thursday, the Dow shed 1.5% and the S&P 500 decline
1.6%, amid a flurry of concerns over economic growth and
geopolitical tensions.
Recent action leaves the major indexes poised for weekly losses.
The S&P 500 is off 1.8% this week. Investors remained concerned
about economic growth overseas, especially in China and the
eurozone.
Still, many money managers remain optimistic about the outlook
for stocks, arguing that steady economic growth in the U.S. means
that the market can handle tighter Fed policy. Investors widely
expect the central bank to raise rates sometime next year after
winding down its bond-buying program in October.
"We're not surprised to see a bit of a selloff and volatility
because we've gone so long without seeing even a little bit of a
hiccup," said Sean Lynch, managing director of global equity
strategy and research for Wells Fargo Private Bank, which manages
$179 billion.
Before the open, the Commerce Department reported that the U.S.
economy grew at a rate of 4.6% in the second quarter, up from a
previous estimate of 4.2%. The result was in line with
expectations. The reading on September's consumer sentiment pf
84.6, up from August's 82.5, was in line with expectations.
"Ultimately strong economic growth is good for the markets,"
said Doug Cote, chief market strategist at Voya Investment
Management. "I'm a buyer at these levels."
Stocks were mixed overseas. Japan's Nikkei Stock Average fell
0.9% to 16,229.86, dropping back into negative territory for the
year. In Europe, the Stoxx Europe 600 index gained 0.4%.
The dollar continued to strengthen against major rivals. The
euro fell to $1.27 from $1.2751 late Thursday.
The yield on the benchmark 10-year Treasury note rose to 2.522%,
according to FactSet. Yields move inversely with prices.
Some investors say that Thursday's selloff and the resulting
spike in market volatility simply mark a return to normal trading
patterns after a sleepy summer for stocks.
"You should expect more volatility than we've had in the past
couple years, and this week is a bit of a taste of that," said Russ
Koesterich, chief investment strategist at BlackRock.
For Friday "it looks like the market has quieted down," Mr.
Koesterich said. "A couple things are helping--the GDP print was in
line, and also we didn't see a lot of follow-through selling
overseas."
In other corporate news, BlackBerry Ltd. posted earnings
results, which included a smaller-than-expected loss and a sharp
drop in revenue. Shares rose 6%.
Shares of Janus Capital Group Inc. rose 30%. Bill Gross, founder
of Pacific Investment Management Co., will join Janus next
week.
Shares of Apple Inc. rose 1.8%. The company has been defending
itself against reports that its new, larger iPhone bends easily in
people's pockets. The company also released a new update of
software for its mobile devices after yanking its previous
update.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Corrie
Driebusch at corrie.driebusch@wsj.com