Tech stocks trigger Wall St. rally
NEW YORK — US stocks rallied on Friday, lifted by gains in technology stocks and a retreat in Treasury yields as the Federal Reserve eased concerns about the path of interest rate hikes this year.
The US central bank, looking past the recent stock market selloff and inflation concerns, said it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes. Investors largely expect the Fed to raise rates three times this year, beginning with its next meeting in March, the first under new Chair Jerome Powell. Traders currently see a 95.5% chance of a quarter- percentage- point hike next month, according to Thomson Reuters data.
“Certainly bond yields pulling back today is helpful for stocks, at least for the short term, that has been the narrative that is out there — that higher bond yields are weighing on stocks and this preoccupation with 3%,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “So moving away from that, for today at least, provides a bid for equities.”
Mr. Powell’s first public outing will be on Tuesday, when he will testify separately before the House and Senate committees.
The Dow Jones Industrial Average rose 347.51 points or 1.39% to 25,309.99; the S&P 500 gained 43.34 points or 1.60% to 2,747.30; and the Nasdaq Composite added 127.30 points or 1.77% to 7,337.39.
Benchmark 10-year US Treasury notes last rose 13/32 in price to yield 2.8714%, from 2.917% late on Thursday.
The dip in yields helped boost bond proxy sectors such as utilities, up 2.66%, and real estate, up 1.72%. The sectors have been among the worst performers so far this year on expectations of climbing rates.
Tech shares climbed 2.17% led by gains in Hewlett Packard Enterprise (HPE), which rose 10.5% and HP, Inc., up 3.5%. Both firms created from the split of Hewlett Packard Co. in 2015, reported strong results and HPE also announced a plan to return $7 billion to shareholders.
For the week, the Dow rose 0.37%; the S&P advanced 0.56%; and the Nasdaq gained 1.35%. Advancing issues outnumbered declining ones on NYSE by 4.54 to one; on Nasdaq, a 2.82-to-one ratio favored advancers. Volume on US exchanges was 6.05 billion shares, below the 8.38 billion average over the last 20 trading days. —