The stock markets in the United States rebounded and ended the week with gains as companies in the consumer sector led the rally. The Dow Jones Industrial Average (DJIA) rose 0.36%, the S&P 500 went up 0.46% while the Nasdaq climbed 0.11% on Friday.

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According to Bloomberg, the shares of corporations in the consumer discretionary sector increased 0.6% as economic data indicated that household spending climbed to the highest level in February.

In a telephone interview, Chris Gaffney, senior market strategist at EverBank Financial told Bloomberg, “If consumers go back in and are confident enough to start spending again; that supports earnings and will certainly support the equity market. I feel like we’re forming a base that we can move high now.”

On the other hand, Eric Marshall, portfolio manager at Hodges Funds noted that the stock markets are showing a healthy sign. He said, “We’re seeing a little bit of a recoil rally after the profit taking over the past couple weeks. We’ve seen some sector rotation more to the quality names. That’s a healthy sign.”

U.S. Markets

  • Dow Jones Industrial Average (DJIA)- 16,323.06 (+0.36%)
  • S&P 500- 1,857.62 (+0.46 %)
  • NASDAQ- 4,155.76 (+0.11%)
  • Russell 2000- 1,151.70 (+0.02%)

European Markets

  • EURO STOXX 50 Price EUR- 3,172.43 (+1.23%)
  • FTSE 100 Index- 6,615.58 (+0.41%)
  • Deutsche Borse AG German Stock Index DAX- 9,587.19 (+1.44%)

Asia Pacific Markets

  • Nikkei 225- 14,696.03 (+1.01%)
  • Hong Kong Hang Seng Index- 22,065.53 (-0.24%)
  • Shanghai Shenzhen CSI 300 Index- 2,151.97 (-0.17%)

Stocks in Focus

The stock price of Cognizant Technology Solutions Corp (NASDAQ:CTSH) rose more than 4% to $49.65 per share after analysts at Morgan Stanley (NYSE:MS) upgraded its rating for the stock to Overweight, which is equivalent to a Buy rating. Morgan Stanley analyst Katy Huberty indicated that the company’s growth potential may have been underestimated. The StreetRatings Team also recommends a Buy rating for the stock citing multiple strengths including robust revenue growth, solid financial position with reasonable debt levels, and an impressive record of earnings per share growth.

Red Hat Inc (NYSE:RHT) declined almost 7% to $52.23 per share after the company projected lower than expected earnings of $1.54 to $1.56 per share on $1.73 billion to $1.75 billion revenue this year. Wall Street analysts estimated that it will be able to deliver $1.58 earnings per share on $1.75 billion revenue Red Hat is the largest seller of Linux operating system software.

The shares Restoration Hardware Holdings Inc (NYSE:RH) climbed nearly 13% to $71.93 per share after the company projected that it will be able to generate earnings in the range of $0.09 to $0.11 per share in the first quarter. The guidance issued by the retailer of home furnishing is higher than the $0.06 earnings per share estimate of Wall Street analysts.  The company also forecasted that its profit for the full year will be around $2.22 per share, higher than the $2.18 per share expected by analysts.