Tech stock rally comes with end of rough week

YORK» Stocks rebounded Friday, NEW 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 smallcompany stocks had its worst week since early 2016.

Big technology and consumerfocused 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: 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 sixday 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 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 Chairman Jerome Powell helped set off a wave of selling in the bond market as investors bet that the U.S. economy would keep growing at a healthy pace. That pushed bond prices lower and sent yields up to sevenyear highs. And 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.

“What seems to have driven this is a fear that interest rates were going to rise more quickly because the Fed was being too aggressive or the economy was going to overheat,” said David Kelly, chief global strategist for JPMorgan Funds.