Markets shake off some early wobbles, finish mostly higher
Banks, industrial firms lead turnaround; tech stocks show weakness
Stocks regained their footing after an early slide and closed broadly higher Thursday, led by gains in financial and industrial companies.
The S&P 500 rose 0.5 percent after having been down 0.9 percent in the early going. The gain is the benchmark index’s first in three days after a recent stretch of back-and-forth trading the last few weeks. Even so, the S&P 500 was still on track for a small weekly loss.
Banks and industrial companies powered much of the market’s late-afternoon turnaround, offsetting weakness in Microsoft, Netflix, Facebook and other Big Tech stocks. Treasury yields initially eased, then edged higher following encouraging reports on weekly jobless claims and fourth-quarter U.S. economic growth.
Investors have been moving money away from expensive tech stocks as part of a broader shift to stocks tied more closely to economic growth. There’s a good chance the recovery could be surprisingly strong with little interference from the Federal Reserve, said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management.
“There is a very clear message that the Fed is going to sit back and let the economy grow at a hotter rate because their number one priority is unemployment,” he said. “That means there’s a good chance the economy overshoots.”
The S&P 500 rose 20.38 points to 3,909.52. The Dow Jones Industrial Average gained 199.42 points, or 0.6 percent, to 32,619.48. The index had been
down more than 348 points.
The tech-heavy Nasdaq composite had been down 1.4 percent before clawing back 15.79 points, or 0.1 percent, to 12,977.68. The Russell 2000 index of smaller stocks outdid the rest of the market, climbing 48.86 points, or 2.3 percent, to 2,183.12.
The market has been mostly tumbling in place recently, with support for stocks coming from expectations that the economy will soar soon thanks to COVID-19 vaccinations and huge amounts of spending by Washington.
A quick rise in interest rates has undercut stocks at the same time, though.
Yields in the Treasury market rose, but at a modest pace after the 10-year yield spiked above 1.70 percent last week, its highest level since before the pandemic started. The 10-year Treasury yield, which helps set rates for all kinds of loans, rose to 1.63 percent, from 1.61 percent Wednesday.
Big tech stocks swung back and forth in earlier trading and were nearly evenly split within the S&P 500 index. Microsoft fell 1.3 percent, while Hewlett Packard Enterprise rose 3.9 percent.