Shares rally but finish week lower
Stocks on Wall Street managed to end a bumpy day broadly higher Friday but still finished with their worst week in nearly three months.
The Standard & Poor’s 500 index rose 1.3% the day after dropping nearly 6% in its biggest rout since midMarch. It lost 4.8% for the week, snapping its threeweek winning streak. Smallcompany stocks and bond yields rose, meaning investors were a bit more willing to take on risk again the day after the sell-off.
The volatility this week interrupted what had been a dramatic rally for the market as investors reevaluated their expectations for future economic growth, which skeptics have been saying were overly optimistic.
After surging Monday, stocks sold off for three straight days as a rise in COVID-19 cases in the U.S. and a discouraging economic outlook from the Federal Reserve dashed investors’ optimism that the economy will recover relatively quickly as states lift stay-at-home orders and businesses reopen.
“Yesterday was the market taking a needed breath and saying, ‘OK, this is probably going to take more time than we were expecting,’ ” said Willie Delwiche, investment strategist at Baird.
“Today, it’s, ‘Maybe we overreacted yesterday.’ ”
The comeback rally lost some of its early strength as Friday went on. The S&P 500 shed more than half of its early gains, ending the day up 39.21 points at 3,041.31.
The Dow Jones industrial average rose 477.37 points, or 1.9%, to 25,605.54. It had been up more than 800 points in the early going.
The Nasdaq, which climbed above 10,000 points for the first time Wednesday, gained 96.08 points, or 1%, to 9,588.81. The Russell 2000 index of smaller companies fared better than the rest of the market, climbing 31.46 points, or 2.3%, to 1,387.68. European markets closed mostly higher. Asian markets ended broadly lower.
Investors have been balancing optimism about the reopening of the economy against the possibility that the relaxing of restrictions will lead to a surge in new coronavirus infections and deaths. Cases are climbing in nearly half the states, according to an Associated Press analysis, a trend that could intensify as people return to work and venture out during the summer.
Technology, financial and industrial stocks were among the big gainers Friday. Utilities stocks posted a small loss. Companies that were among the biggest losers Thursday were big gainers Friday, including airlines and cruise lines.