S&P 500 Jumps 1.5% Friday As Big Tech Rebounds, But Still Posts A Weekly Loss
U.S. stocks jumped on Friday led by technology shares and reopening trades, as Wall Street rebounded for a second day from steep losses earlier this week.
The Dow Jones Industrial Average climbed 360.68 points, or nearly 1.1%, to 34,382.13. The S&P 500 gained 1.5% to 4,173.85. The tech-heavy Nasdaq Composite, the relative underperformer for the week, snapped back by 2.3% to 13,429.98.
The major averages experienced a roller-coaster week that saw the blue-chip Dow drop nearly 1,200 points from Monday to Wednesday. The S&P 500 and the Nasdaq fell 4% and 5%, respectively, during that period. The indexes have since rebounded from the steep sell-off, but they still posted modest losses for the week as inflation fears hit sentiment. The Dow and the S&P 500 fell more than 1% each this week, while tech stocks got hit especially hard, pulling the Nasdaq down over 2.3% for the week.
“This week’s decline was a good thing,” said Tony Dwyer, chief market strategist at Canaccord Genuity. “There needs to be a correction into the summer that is meaningful enough to eliminate the extreme intermediate-term overbought condition and excess optimism.”
Tech stocks were the biggest outperformers Friday. Tesla gained more than 3%. Facebook jumped 3.5%, while Alphabet and Microsoft rose more than 2%. Apple, Amazon and Netflix also all climbed over 1%.
Disney shares were bucking the trend. The company, which posted weaker-than-expected revenue and streaming subscribers, closed down 2.6%.
Stocks most exposed to the ongoing recovery jumped again Friday after the Centers for Disease Control and Prevention eased guidelines, saying that in most settings fully vaccinated people don’t need to wear masks indoors or outdoors.
United Airlines and American Airlines both climbed more than 5%. Carnival and Norwegian Cruise Line shares both popped more than 8%, while Royal Caribbean advanced more than 7%.
The market’s volatility this week comes as economic data points to inflation. The Consumer Price Index jumped 4.2% from a year earlier in April, which was the fastest rate since 2008. This has sparked fears that the Federal Reserve could be forced to dial back its accommodative monetary policy.
Stocks advanced on Friday even after data showed consumer purchases slowed down last month. Advance retail sales were flat for April, the Commerce Department reported Friday. That compared to the Dow Jones estimate of a 0.8% gain and a 9.8% surge in March.
Still, earnings season has been stronger-than-expected, and some believe this bull market has more room to run and investors should take advantage of any dips.
“The corporate turnaround is strong enough to keep markets rising, even as bond yields increase in anticipation of central bank tightening,” Robert Buckland, equity strategist at Citi, said in a note. “So buy any short term dips, as we may be seeing now. There is a time to turn more cautious but that may be next year, not this.”