Wall Street ends a choppy day mostly higher
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 small company 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 earlier this year as demand sank due to 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 semi-autonomous 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.
The proposed bill is aimed at forbidding secessionist and subversive activity, as well as foreign interference and terrorism. The move has drawn strong rebukes from the U.S. government and rights groups.
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