Dow climbs 287 points after ‘tough week’ of big losses
Stocks pulled off a strong showing Friday, but the rally wasn’t quite enough to recoup the steep losses from an earlier two-day rout.
The Dow Jones industrial average rose 287.16 points, or 1.15 percent, to close at 25,339.99. Still, the blue-chip index shed 1,107 points this week, its worst since March. On Wednesday, the index dropped more than 800 points, the biggest loss since February.
Other indexes, while making gains Friday, had similar bad weeks. The Standard & Poor’s 500 index lost 4.1 percent, while the tech-heavy Nasdaq – hardest hit in Wednesday’s battering – ended the week down 3.74 percent.
The Russell 2000’s performance was the worst, however. The small-company stock index fell into official correction territory Thursday and ended the week 11.16 percent off its Aug .31 peak.
“Obviously, it was a tough week. The good news is things have stabilized today, and, while we’re off from the day’s highs, the rebound was broad,” said Chris Cook, founder and president of Beacon Capital Management.
Anxiety over a jump in interest rates coupled with the uncertain impact of Chinese tariffs on the economy ignited the sell-off Wednesday. Tech darlings got hammered hard two days ago but rebounded with noise Friday. Amazon gained 4.03 percent, Apple increased 3.57 percent, and Netflix jumped 5.75 percent. The biggest losers were trade-prone stocks such as Caterpillar, Boeing and 3M, which all lost almost 7 percent this week.
“We are moving away from a market driven by low interest rates to one ... based more on fundamentals, so companies dependent on borrowing for growth – like tech stocks – look less attractive,” said Timothy Chubb, CIO at Univest Wealth Management Division. “Investors are getting accustomed to that.”
“Just because the market has been on the rise for such a long time doesn’t mean the race is over,” said Joe Wirbick, president of Sequinox, a financial planning firm in Lancaster, Pennsylvania. “Markets shift. That’s just life.”