Wall Street rallies to cap an erratic week
NEW YORK — Optimism returned to Wall Street on Friday as stocks surged to close a shaky week dogged by worries that rising coronavirus counts could halt the economy’s recent upswing.
The S&P 500 climbed 1 percent, 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.
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 percent.
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 hot spots around the world. The S&P 500 flipflopped between a gain and loss each day of the week.
Analysts said an encouraging report from Gilead Sciences about its COVID-19 treatment, remdesivir, helped drive Friday’s rebound.
“So, for the first time in a lot of days we’re seeing smaller caps outperform,” said Bob Shea, CEO of TrimTabs Asset Management. “We’re seeing just a kind of mean-reversion day, and they’re using the Gilead news to do it.”
The week’s meandering action was a microcosm of the up-and-down 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 a 34 percent plummet. Massive amounts of aid from central banks and governments around the world ignited the rally.
“We are dealing with an unprecedented time economically,” said Katerina Simonetti, senior portfolio manager at UBS Private Wealth Management. “We have to remember that the government support and economic stimulus has been historically unprecedented. That’s a huge deal, and it’s going to make a difference for this market.”
It also helped send the S&P 500 to a 1.8 percent rise for the week, its second straight weekly gain.
“The market is in a kind of place where good news is a rally and bad news (means) ‘the Fed’s got us,’ ” Shea said. “That’s the win-win the market has had for the last several weeks.”
Energy stocks rose with the price of oil, which has swung sharply with hopes for the economy.