Tech rally helps snap los­ing streak as rough week ends

Daily Local News (West Chester, PA) - - BUSINESS - By Mar­ley Jay

NEW YORK » Stocks re­bounded Fri­day, claw­ing back some of the week’s steep losses, but the tur­bu­lent trad­ing of the last few days left no doubt that the rel­a­tive calm the mar­kets en­joyed all sum­mer had been shat­tered.

Ma­jor U.S. in­dexes ended the week down about 4 per­cent, their worst weekly loss in six months. An in­dex mea­sur­ing the per­for­mance of small-com­pany stocks had its worst week since early 2016.

Big tech­nol­ogy and con­sumer-fo­cused com­pa­nies led the re­cov­ery Fri­day. Long­time fa­vorites of many in­vestors, they had plunged in the last few days.

A ma­jor fac­tor cited by mar­ket watch­ers for the pull­back was a sharp in­crease in in­ter­est rates, which can slow the econ­omy and make bonds more at­trac­tive to in­vestors rel­a­tive to stocks.

Ap­ple climbed 3.6 per­cent to $222.11 and Mi­crosoft gained 3.5 per­cent to $109.57. Ama­zon jumped 4 per­cent to $1,788.41. Those are the three most valu­able com­pa­nies in the U.S., and they suf­fered star­tling de­clines the last few days: on Wed­nes­day each took its big­gest loss in more than two years. That made for a dra­matic end to three months of calm on the U.S. mar­ket.

The S&P 500 in­dex rose 38.76 points, or 1.4 per­cent, to 2,767.13 to end a six-day los­ing streak. The bench­mark in­dex tum­bled 4.1 per­cent this week, and it’s down 5.6 per­cent since from its lat­est record high, set Sept. 20. Thanks in part to the big gain for tech­nol­ogy com­pa­nies, the Nas­daq com­pos­ite jumped 167.83 points, or 2.3 per­cent, to 7,496.89.

The Dow Jones In­dus­trial Av­er­age rose as much as 414 points early on, then gave it all up and turned slightly lower. It re­bounded and fin­ished with a gain of 287.16 points, or 1.1 per­cent, at 25,339.99.

The mar­ket’s re­cent skid started last week, when strong eco­nomic data and pos­i­tive com­ments from Fed­eral Re­serve Chair Jerome Pow­ell helped set off a wave of sell­ing in the bond mar­ket as in­vestors they bet that the U.S. econ­omy would keep grow­ing at a healthy pace. That pushed bond prices lower and sent yields up to seven-year highs.

That drove in­ter­est rates sharply higher, which wor­ried stock in­vestors who felt that a big in­crease could sti­fle eco­nomic growth. The big swings in the mar­ket Fri­day sug­gest those fears haven’t gone away. The VIX, a mea­sure­ment of how much volatil­ity in­vestors ex­pect, hasn’t been this high in six months.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.