Stocks inch up, cap­ping a week of solid in­creases

Los Angeles Times - - BUSINESS - AS­SO­CI­ATED PRESS

Stock indexes fin­ished mostly higher Fri­day as Wall Street shook off an early slide, clos­ing out a solid week of gains for the mar­ket.

The S&P 500 in­dex inched up 0.2% af­ter hav­ing been down 0.5%. It ended the week with a 3.2% gain, largely due to a big rally on Mon­day that off­set all of the bench­mark in­dex’s losses from ear­lier in the month.

Strength in tech­nol­ogy, com­mu­ni­ca­tions and real es­tate stocks helped re­verse much of the mar­ket’s early slide. En­ergy stocks fell the most as crude oil prices closed lower af­ter six straight gains.

Bond yields were mixed. Trad­ing was choppy for much of the day ahead of the long hol­i­day week­end. Mar­kets in the U.S. will be closed Mon­day for Me­mo­rial Day.

Fresh hopes for a U.S. eco­nomic re­cov­ery in the sec­ond half of the year and op­ti­mism about a po­ten­tial vac­cine for COVID-19 helped spur stocks higher for much of the week.

In­vestors are bet­ting that the econ­omy and cor­po­rate prof­its will be­gin to re­cover from the coro­n­avirus out­break as the U.S. and coun­tries around the world slowly open up again.

Traders re­main wary, how­ever, that the re­open­ing of busi­nesses could lead to an­other surge in in­fec­tions, po­ten­tially hob­bling ef­forts to get the na­tion’s bat­tered econ­omy grow­ing again.

The S&P 500 rose 6.94 points to 2,955.45. The in­dex is still down 12.7% from its all-time high in Fe­bru­ary. The Dow Jones in­dus­trial av­er­age slipped 8.96 points, or less than 0.1%, to 24,465.16. The Nas­daq com­pos­ite added 39.71 points, or 0.4%, to 9,324.59.

De­spite the un­even fin­ish, the three ma­jor stock indexes each ended the week more than 3% higher.

Those gains were blown away by the rally in small­com­pany stocks, which drove the Rus­sell 2000 in­dex 7.8% higher for the week, a bullish sig­nal sug­gest­ing that in­vestors ex­pect that the econ­omy is on the path to re­cov­ery.

On Fri­day, the Rus­sell 2000 gained 7.97 points, or 0.6%, to 1,355.53.

Fears of a crush­ing re­ces­sion due to the coro­n­avirus sent the S&P 500 into a skid of more than 30% from its high in Fe­bru­ary. Hopes for a rel­a­tively quick re­bound and un­prece­dented moves by the Fed­eral Re­serve and Congress to stem the eco­nomic pain drove a his­toric re­bound for stocks in April and have bol­stered op­ti­mism that the mar­ket won’t re­turn to the depths its ex­pe­ri­enced in March.

In­vestors are now keenly fo­cused on the process of re­open­ing the U.S. econ­omy, which is likely to con­tinue ac­cel­er­at­ing as the sum­mer pro­gresses.

Oil prices fell, snap­ping a six-day win­ning streak. Bench­mark U.S. crude oil fell 2% to set­tle at $33.25 a bar­rel. Brent crude oil, the in­ter­na­tional stan­dard, fell 2.6% to set­tle at $35.13 a bar­rel.

Crude oil started the year at about $60 a bar­rel but plum­meted as de­mand sank be­cause of wide­spread travel and busi­ness shut­downs re­lated to the coro­n­avirus. The price has risen this month as oil-pro­duc­ing na­tions cut back on out­put and the grad­ual re­open­ing of economies around the globe has driven up de­mand.

Bond yields were mixed. The yield on the 10-year Trea­sury note, a bench­mark for in­ter­est rates on many con­sumer loans, fell to 0.66% from 0.67% late Thurs­day.

The choppy trad­ing on Wall Street fol­lowed a down­beat day in Asia. Hong Kong’s main in­dex dropped 5.6% af­ter China made more moves to limit po­lit­i­cal op­po­si­tion in the for­mer Bri­tish colony. Bei­jing also aban­doned its long-stand­ing prac­tice of set­ting eco­nomic growth tar­gets. Euro­pean mar­kets shook off some early weak­ness and ended mixed.

Bei­jing’s move to take over long-stalled ef­forts to en­act na­tional se­cu­rity leg­is­la­tion in semi­au­tonomous Hong Kong spooked in­vestors in Asian mar­kets who have en­dured months of pro-democ­racy demon­stra­tions last year that at times de­scended into vi­o­lence be­tween po­lice and pro­test­ers.

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