Russian President Vladimir Putin called for a ceasefire in eastern Ukraine, where pro-Russian separatists are believed to have downed a Malaysian Airlines aircraft Thursday. There has been some speculation that Putin would have to clamp down on the separatist movement as a result of the tragic plane crash, which would be a plus for global market stability.
Additionally, investors may have leaned too negative on Thursday, which also saw Israel begin an invasion of Gaza.
The VIX (INDEXCBOE:VIX) rose 32% yesterday, which on a historic basis, constitutes an enormous move and is indicative of major fear.
Today, as investors caught their collective breath, the VIX dropped 16% as the S&P 500 (INDEXSP:.INX) rebounded 1.0% to close at 1,978.22.
Additionally, gold and US Treasuries sold off, while riskier assets like tech stocks and junk bonds bounced, indicating that -- in keeping with recent history -- the bulls will not be easily shaken by geopolitical events.
Earnings news supported the action, with NASDAQ Composite (INDEXNASDAQ:.IXIC) heavyweight Google (NASDAQ:GOOG) impressing investors with its strong revenue growth.
Apple (NASDAQ:AAPL) also did some heavy lifting for the major indices, rising 1.4% to $94.43 ahead of next week's earnings report.
Both General Electric (NYSE:GE) and IBM (NYSE:IBM) had modest sell-offs on their respective earnings reports, while Advanced Micro Devices (NYSE:AMD) dropped 16.2% on weak guidance.
In economic news, the July University of Michigan Sentiment Survey was 81.3, slightly below the 83.0 consensus. And the June Leading Economic Indicators Index was 0.3% vs. the 0.5% expected.
Tomorrow's Financial Outlook
The June Chicago Fed National Activity Index will be reported at 8:30 am ET.
Some major companies will report earnings, including Halliburton (NYSE:HAL), ManPower (NYSE:MAN), and Texas Instruments (NYSE:TXN).
However, even with Friday's rebound, investors remain focused on Eastern Ukraine and Israel. News out of those regions could impact the trading action.
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