NEW YORK (AP) – Optimism returned to Wall Street on Friday, and stocks rallied to end a shaky week, fearing that rising coronavirus numbers might end the recent economic recovery.
The S&P 500 climbed 1%, and the biggest gains came from cruise ship operators, airlines, banks and other businesses that need the economy most to keep reopening and reinforce.
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 increased from 32.99 to 3,185.04.
After starting on Friday with modest declines, stocks and yields on Treasury bills have wiped out their declines to rebound. In a sign of rising expectations for the economy, the Russell 2000 Smaller Stock Index rose more than the rest of the market, up 1.7%.
These are the last whirlwinds of what has been an erratic week for the markets. Prices have fluctuated, sometimes sharply in a single day, with concerns about rising hospitalizations and COVID-19 trends in Florida and other hotpots around the world. The S&P 500 toggled between a gain and a loss every day of the week.
Analysts said an encouraging report from Gilead Sciences on its experimental treatment of COVID-19, remdesivir, contributed to Friday’s rebound.
“So for the first time in many days, we are seeing outperformance in small caps,” said Bob Shea, CEO of TrimTabs Asset Management. “We’re having some sort of average reversion day, and they’re using Gilead news to do it. “
The curvy action of the week was a microcosm of the ascent and descent in which stocks have been stuck for just over a month. Market dynamics have slowed since the start of June, after the S&P 500 rebounded to recover most of a previous 34% dip. Massive amounts of aid from central banks and governments around the world have sparked the recovery.
“We are living in unprecedented economic times,” said Katerina Simonetti, senior portfolio manager at UBS Private Wealth Management. “We must remember that government support and economic recovery are historically unprecedented. It’s a huge deal, and it’s going to make a difference for this market. “
It also helped push the S&P 500 up 1.8% for the week, its second consecutive weekly gain.
“The market is in a kind of place where the good news is a rally and the bad news,” the Fed told us, “said Shea of TrimTabs Asset Management. “It’s been the win-win market for several weeks.”
The actions of the companies most in need of the economy to continue improving and reopening dominated the top of Friday’s rankings.
Carnival tour operator jumped 10.8%, Royal Caribbean Cruises gained 9.9% and United Airlines increased 8.3%.
Banks were also particularly strong, with financial values for the S&P 500 up 3.5% for the largest gain among the 11 sectors in the index. A stronger economy would mean that their borrowers are better able to repay their loans.
JPMorgan Chase and Bank of America increased 5.5%, while Citigroup jumped 6.5%.
Energy values rose with the price of oil, which rocked sharply with hopes for the economy. The benchmark US crude oil rose 93 cents to $ 40.55 a barrel. Brent crude added 89 cents to $ 43.24 a barrel.
Behind the rest of the market, some of the stocks have held up best this year: the big tech-oriented giants. Microsoft fell 0.3% and Apple edged up 0.2%. It is at least a pause for these stocks, which crossed the pandemic this year, as investors bet they will continue to grow almost regardless of the strength of the economy.
The 10-year Treasury yield, which tends to evolve with investors’ expectations for the economy and inflation, rose to 0.64% against 0.60% on Thursday evening.
On the overseas stock markets, European markets soared after reports showed that industrial production had rebounded strongly in some countries.
The CAC 40 in France increased by 1%, while the German DAX reported 1.2%. The London FTSE 100 gained 0.8%.
The Asian markets were more moderate. The Nikkei 225 in Tokyo lost 1.1%, the Hang Seng in Hong Kong fell 1.8% to 25,727.41 and the Kospi in Seoul lost 0.8%.
Even Chinese stocks have taken a break from their steamy race. Shanghai stocks fell nearly 2% for their first decline in almost two weeks. They are still up 14.2% over this period.