Wall Street rallies as optimism returns to cap erratic week
NEW YORK — Optimism returned to Wall Street on Friday, and stocks rallied to cap a shaky week dogged by worries that rising coronavirus counts may halt the economy’s recent upswing.
The S&P 500 climbed 1%, and the biggest gains came from cruise ship operators, airlines, banks and other companies that most need the economy to continue to reopen and strengthen.
The Dow Jones Industrial Average rose 369.21 points, or 1.4%, to 26,075.30. The Nasdaq composite added 69.69, or 0.7%, to 10,617.44, a new high. The S&P 500 rose 32.99 to 3,185.04.
After starting Friday with modest drops, stocks and Treasury yields erased their declines to drive higher. In a signal of rising expectations for the economy, the Russell 2000 index of smaller stocks rose more than the rest of the market, up 1.7%.
They’re the latest eddies in what was an erratic week for markets. Prices swung, sometimes sharply within a single day, with worries about rising hospitalizations and COVID-19 trends in Florida and other hotpots around the world. The S&P 500 flip-flopped between a gain and loss through each day of the week.
Analysts said an encouraging report from Gilead Sciences about its investigational treatment of COVID-19, remdesivir, helped drive Friday’s rebound.
The week’s meandering action was a microcosm of the up-anddown churn that stocks have been stuck in for a little more than a month. The market’s momentum has stalled since early June, after the S&P 500 roared back to recover most of an earlier 34% plummet. Massive amounts of aid from central banks and governments around the world ignited the rally.
It also helped send the S&P 500 to a 1.8% rise for the week, its second straight weekly gain.
Stocks of companies that most need the economy to continue improving and reopening dominated the top of Friday’s leaderboard.
Cruise operator Carnival jumped 10.8%, Royal Caribbean Cruises gained 9.9% and United Airlines rose 8.3%.
Banks were also particularly strong, and financial stocks in the S&P 500 climbed 3.5% for the biggest gain among the 11 sectors in the index. A stronger economy would mean their borrowers are better able to repay their loans.
JPMorgan Chase and Bank of America both rose 5.5%, while Citigroup jumped 6.5%.
Energy stocks rose with the price of oil, which has swung sharply with hopes for the economy. Benchmark U.S. crude oil rose 93 cents to settle at $40.55 per barrel. Brent crude added 89 cents to $43.24 per barrel.
Lagging behind the rest of the market were some of the stocks that have been holding up best this year: big tech-oriented giants. Microsoft dipped 0.3%, and Apple edged up 0.2%. It’s at least a pause for such stocks, which have climbed through the pandemic this year as investors bet they’ll keep growing almost regardless of the economy’s strength.
The yield on the 10-year Treasury, which tends to move with investors’ expectations for the economy and inflation, rose to 0.64% from 0.60% late Thursday.