US stocks end 5-day losing streak
U.S. stocks ended a down week on a high note Friday, snapping a five-day losing streak on the strength of energy and financial companies. A sharp rebound in oil prices and an encouraging report on retail sales helped lift the stock market. Despite the rally, the major U.S. stocks indexes ended the week down about 1 percent and they remain down more than 8 percent for the year.
"It's a relief to see after several very ugly days in a row, but I wouldn't hang my hat on it and say the worst is over," said Rob Eschweiler, global investment specialist at J.P. Morgan.
The Dow Jones industrial average rose 313.66 points, or 2 percent, to 15,973.84. The Standard & Poor's 500 gained 35.70 points, or 2 percent, to 1,864.78. The Nasdaq composite added 70.67 points, or 1.7 percent, to 4,337.51.
Global stocks have been in a slump since the beginning of the year on concerns that growth in China, which has been the engine of the global economy in recent years, is slowing far faster than expected. Plunging oil prices and low inflation have added to the market's jitters that the global economy is sputtering.
Those worries also helped drive the stock market lower in recent days, and continued to batter stocks in Asia. Japan's main stock index lost nearly 5 percent Friday. But the downbeat trend in the United States snapped as investors were encouraged by retail sales and a rally in European stocks.
A surge in oil prices helped put investors in a buying mood early on. A day after sinking to its lowest level since May 2003, benchmark U.S. crude climbed $3.23, or 12.3 percent, to close at $29.44 a barrel in New York. Brent crude, a benchmark for international oils, gained $3.30, or 11 percent, to $33.36 a barrel in London.
The oil rebound sent the S&P 500's energy companies 2.6 percent higher. Marathon Oil was the best performer in the sector, rising 48 cents, or 6.8 percent, to $7.49.
"Oil, which has been one of the most fickle, most volatile series that everybody's watching, is having a nice day," said Tim Dreiling, regional investment director for The Private Client Reserve of U.S. Bank. "Europe is continuing to look good. And it looked like [the market] was oversold." Financial shares led the market's advance. The sector is the worst performing part of the market this year because investors expect that low interest rates around the world will sap bank profits, but it rallied 4 percent Friday.