Optimism returns to cap erratic week
Optimism returned to Wall Street on Friday, and stocks rallied to cap a shaky week dogged by worries that rising coronavirus counts may halt the economy’s recent upswing.
The S&P 500 climbed 1%, 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.
The Dow Jones Industrial Average rose 369.21 points, or 1.4%, to 26,075.30. The Nasdaq composite added 69.69, or 0.7%, to 10,617.44, a new high. The S&P 500 rose 32.99 to 3,185.04.
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%.
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 hotspots. The S&P 500 flip-flopped between a gain and loss each day of the week.
Analysts said an encouraging report from Gilead Sciences about its investigational treatment of COVID-19, remdesivir, helped drive Friday’s rebound.
Stocks of companies that most need the economy to continue improving and reopening dominated the top of Friday’s leaderboard.
Cruise operator Carnival jumped 10.8%, Royal Caribbean Cruises gained 9.9% and United Airlines rose 8.3%.
Banks were also particularly strong, and financial stocks in the S&P 500 climbed 3.5% for the biggest gain among the 11 sectors in the index.
A stronger economy would mean banks’ borrowers are better able to repay their loans. JPMorgan Chase and Bank of America both rose 5.5%, while Citigroup jumped 6.5%.
Energy stocks rose with the price of oil, which has swung sharply with hopes for the economy. Benchmark U.S. crude oil rose 93 cents to settle at $40.55 per barrel. Brent crude added 89 cents to $43.24 per barrel.