At the open of U.S. trade, the Dow Jones Industrial Average spiked 0.80%, the S&P 500 index jumped 0.59% while the Nasdaq Composite index gained 0.39%.
Depressing equity sentiment, Moody’s slashed Italian government bond rating by two levels to Baa2 and reiterated that additional downgrades may be forthcoming.
Baa2 bond rating is two levels above junk bond status and one level higher than Spanish bonds.
However, Italy’s borrowing costs declined at a debt sales helping support market sentiment.
Adding to the negative growth sentiment, China’s GDP expanded 7.6% last quarter from a year prior. This is down from an 8.1% increase the previous period and the 7.7% average analysts forecast.
In addition, China’s exports grew 11.3% last month down from 15.3% in May. While imports increased 6.3% compared with 12.7%.
However, this Chinese slowdown increased hopes that China will increase government economic stimulus leading to the equity rally.
Meanwhile, U.S. producer price inflation rose unexpectedly last month, official data showed on Friday.
In a report, U.S Bureau of Labor Statistics - Department of Labor said that U.S. PPI rose to a seasonally adjusted 0.1%, from -1.0% in the preceding month.
JP Morgan Chase soared 2.6% despite reporting a second quarter USD 4.4 billion trading loss.
Bank of America slashed the earning forecast for the S&P 500 citing slower global growth and lower commodity prices, shares of the bank added 2.64% at the open.
Boeing added 0.88% despite slowing airbus sales at the airshow.
In bearish news, U.S. UoM consumer sentiment fell unexpectedly last month, preliminary data showed on Friday.
In a report, the University of Michigan said that consumer sentiment fell to a seasonally adjusted 72.0, from 73.2 in the preceding month.
Analysts had expected UoM consumer sentiment to rise to 73.4 last month.
In the middle of European trade, the EURO STOXX 50 is up 0.70%, France’s CAC 40 added 0.76%, while Germany’s DAX 30 soared 1.36%.