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 It was supposed to be a risk-off day. But stocks rallied. First, the scoreboard: - Dow: 16,553.9, +185.6, (+1.1%)
- S&P 500: 1,931.5, +22.0, (+1.1%)
- Nasdaq: 4,371.1, +36.1, (+0.8%)
And now, the top stories: - It's unclear what fueled today's stock market rally. Just after 1:00 p.m. ET, Bloomberg citing Interfax reported that "Russia ends exercises for air defenses; Russian warplanes end drills in Astrakhan region." Perhaps this is a sign that Russia may scale back its presence in Ukraine.
- Even if you buy that Ukraine is improving, there's still plenty of geopolitical turmoil elsewhere. "Risk aversion rules," Societe Generale's Kit Juckes said. "Overnight, the U.S. has approved limited airstrikes in Northern Iraq. The conflict on Gaza too, is in danger of re-escalation. Investors have plenty of reasons to take risk off the table and are doing so across the board."
- While stocks were in the green all day, Treasury securities had their own rally reflecting the risk-off mood of the markets. Earlier today, the yield on the 10-year Treasury note touched 2.37% earlier on Friday, the lowest level since June 2013.
- "It's really hard for me to identify why rates should go higher," said Jeffrey Gundlach of DoubleLine Funds. In a phone call with Business Insider, Gundlach reiterated his expectation for the 10-year yield to trade between 2.2% and 2.8%, with the risk that it goes below 2.2%.
- Unit labor costs (ULC) climbed by 0.6% in Q2. This was below the 1.0% rate expected by economists. "This release also includes the broadest measure of compensation per hour growth, and this increased 3.1% y/y in Q2 2014," said Barclays' Dean Maki. "This suggests that compensation is growing faster than narrower measures such as average hourly earnings or the Employment Cost Index suggest. Overall, we view the rise in compensation and unit labor costs revealed in this report as a modestly positive influence on core inflation in coming months."
- Tekmira Pharmaceuticals surged 41%. On Thursday afternoon, management announced that the FDA loosened a hold on the Ebola treatment in the company's development pipeline. "[T]he U.S. Food & Drug Administration (FDA) has verbally confirmed they have modified the full clinical hold placed on the TKM-Ebola Investigational New Drug Application (IND) to a partial clinical hold," they said. "This action enables the potential use of TKM-Ebola in individuals infected with Ebola virus."
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