Stocks rebound but S&P 500 logs biggest weekly drop since March

Dollar recovers; US Treasury yields rise

NEW YORK, Oct 13, (Agencies): Stock markets worldwide rebounded on Friday after a multi-day sell-off but still registered their biggest weekly losses in months, while US Treasury yields rose and the dollar held its gains.

Wall Street snapped a six-day losing streak as investors looked for bargains even as worries about US-China trade tensions lingered. Technology shares led the gains.

But until the United States and China reach a trade deal, the rebound could be vulnerable as investors are anxious about the impact of tariffs on corporate profits. “If earnings come out good I think this rally is sustainable if we don’t get negative trade news,” she said.

All three major US stocks indexes posted their biggest weekly percentage declines since March 23, while the small-cap Russell 2000 index fell 5.2 percent for the week, its biggest weekly drop since January 2016.

The biggest market shakeout since February has been blamed on factors including fears about the impact of the US-China tariff fight, a spike in US bond yields this week and caution ahead of earnings season.

The Dow Jones Industrial Average rose 287.16 points, or 1.15 percent, to 25,339.99, the S&P 500 gained 38.76 points, or 1.42 percent, to 2,767.13 and the Nasdaq Composite added 167.83 points, or 2.29 percent, to 7,496.89.

For the week, the S&P 500 was down 4.1 percent.

The pan-European FTSEurofirst 300 index lost 0.25 percent and MSCI’s gauge of stocks across the globe gained 1.10 percent. The MSCI index was down 3.9 percent for the week in its biggest weekly decline since March 23.

US Treasury yields edged up, recovering from falls in the previous session, as investors unwound safe-haven bids.

Benchmark 10-year US Treasury notes last fell 10/32 in price to yield 3.167 percent, from 3.131 percent late on Thursday.

The dollar climbed against a basket of currencies along with the rebound in equities and as robust Chinese export figures soothed worries about the world’s second-biggest economy and its trade war with Washington.

The dollar index rose 0.25 percent, with the euro down 0.3 percent to $1.1558.

US

The US benchmark S&P 500 stock index snapped a six-day losing streak on Friday as technology stocks recovered after a week of losses, with investors looking for bargains ahead of the third quarter earnings reporting season.

Even the hard-hit S&P 500 energy and financial sectors managed to close the session with slight gains after a late afternoon rally.

The S&P technology index gained 3.2 percent on the day, showing its strongest one-day gain since March 26, although it still registered its biggest weekly drop since March 23.

The Dow Jones Industrial Average rose 287.16 points, or 1.15 percent, to 25,339.99, the S&P 500 gained 38.76 points, or 1.42 percent, to 2,767.13 and the Nasdaq Composite added 167.83 points, or 2.29 percent, to 7,496.89.

The technology sector’s biggest boosts were Apple, and Microsoft which rose more than 3.0 percent. Visa and Mastercard both climbed almost 5.0 percent, boosted by strong credit card sales included in bank earnings reports, according to Oakbook’s Sampson.

The S&P 500’s financial sector ended the day up 0.1 percent and the S&P 500 banks subsector closed down 0.4 percent, well above its session low. The biggest drag on the subsector was JPMorgan Chase & Co, which closed down 1.0 percent despite reporting a quarterly profit that beat expectations.

PNC Financial led the percentage losers among bank stocks, with a 5.6 percent drop after the regional bank reported disappointing quarterly loan growth and said it expected only a small improvement in lending this quarter.

The three gainers among banks included Citigroup, which rose 2.0 percent, and Wells Fargo, which eked out a 1.3 percent gain after upbeat results.

Netflix and Amazon, some of the names that took a big hits in the week’s selloff, rose 5.7 percent and and 4.0 percent respectively.

The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from President Donald Trump’s trade war with China.

Earnings at S&P 500 companies are estimated to have risen 21.5 percent in the third quarter, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.

Energy stocks ended the day up 0.3 percent as oil prices steadied to settle up slightly after a volatile session dropped on a weakening oil demand outlook.

The consumer discretionary and communication services sectors, both rose more than 2.0 percent.

Advancing issues outnumbered declining ones on the NYSE by a 1.38to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored advancers.

The S&P 500 index posted no new 52-week highs and 52 new lows; the Nasdaq Composite recorded 10 new highs and 234 new lows.

Volume on US exchanges was 8.91 billion shares, well above the 7.78 billion average for the last 20 trading days but below the soaring volume of Thursday’s and Wednesday’s sessions.

Europe

European stocks failed to stage a recovery on Friday, posting their worst week since a market correction last February as a new sell-off hit bourses across the globe, amid worries about protectionism and fast-rising US interest rates.

Eurozone stocks initially jumped one percent but rapidly shed all of their gains despite Wall Street opening higher.

All major bourses closed in negative territory and the main regional index ended the day down 0.2 percent and on a weekly loss of 4.8 percent.

That’s just below the 5.1 percent fall back experienced last February when a sudden scare about rising inflation and interest rates caused a global market correction.

There’s “a rotten trend” in Europe, a trader complained, noting that U.S. shares have outperformed their European peers since the beginning of the year with the Trump administration’s fiscal cuts boosting earnings.

Europe lags far behind the United States in terms of earnings growth, and stronger results will be critical in luring back some of the billions that have been pulled out of European stocks this year.

Third-quarter results are beginning to trickle in from European firms as Wall Street banks formally kicked off the earnings season.

Tech stocks - the worst hit by this week’s sudden drop - made a modest comeback, up 0.5 percent, along with the growth-sensitive autos sector

Dutch biotech Argenx rose 5.7 percent after a positive note from broker Piper Jaffray.

Gucci owner Kering was up two percent. The recovery comes after investors sold the sector earlier this week due to its big exposure to Chinese consumers amid fears about slowing growth in the world’s second biggest economy.

Online retailer Zalando gained 2.6 percent and Asos rose 4 percent after Credit Suisse analysts said they were confident that in Europe retail brands preferred the two firms’ platforms to Amazon.

Asia

Asia’s main stock markets traded lower Friday, but losses were relatively muted as investors took a breather after a global rout sparked by fears over higher US interest rates.

Equities in Japan and China were marginally in the red but other smaller markets rebounded into positive territory as the fightback began from a broad-based capitulation over the past two days.

In Tokyo, the main Nikkei-225 index began the day more than one percent lower but bounced back to flirt with positive territory after its mid-session break, down only 0.07 percent.

Chinese stocks, which have seen a ferocious sell-off in recent days, also opened with marginal losses, the benchmark Shanghai Composite shedding 0.36 percent.