Stocks close higher with help from tech but still down for week
Stocks marched solidly higher again Friday, though the major indexes still ended with their worst weekly loss since February after a sharp pullback earlier in the week.
The Standard & Poor’s 500 index rose 1.5%, its second straight gain. The gains were broad, though technology sector stocks powered much of the rally. Retailers, banks, communication companies and industrial stocks also helped lift the market. Energy stocks also rose as the price of U.S. crude oil climbed 2.4%. Treasury yields mostly fell.
Investors’ worries about the possibility of rising inflation as the U.S. economy recovers from the coronavirus pandemic fueled three days of heavy selling to start the week, and the major stock indexes were not able to make up all of those losses in the last two days.
The S&P 500 lost 1.4% for the week, its first weekly decline in three weeks. The Nasdaq marked its fourth weekly pullback in a row, giving up 2.3%, while the Dow Jones industrial average lost 1.1% for the week.
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The market’s rally the last two days reflects a mix of traders piling back into the market, which hit all-time highs last week, to take advantage of lower stock prices, and a boost in confidence after the Centers for Disease Control and Prevention’s decision Thursday to ease mask-wearing guidance for fully vaccinated people. The move is expected to encourage more Americans to go out and spend money, speeding up the reopening of the economy.
The S&P 500 gained 61.35 points to 4,173.85. The Dow rose 360.68 points, or 1.1%, to 34,382.13. The Nasdaq, on which the losses this week have been steepest, added 304.99 points, or 2.3%, to 13,429.98.
Smaller-company stocks, which for most of this year have outgained the broader market, also recovered some of their losses from earlier in the week. The Russell 2000 index picked up 53.68 points, or 2.5%, to 2,224.63.
Disney fell 2.6% after reporting lower revenue and missing forecasts for subscriber growth to its video streaming service. Disney had been adding subscribers at a breakneck pace the last year, helped by popular shows such as “The Mandalorian” and the pandemic, which kept many Americans at home with little to do except watch TV.
DoorDash vaulted 22.1% after after the company said its revenue tripled from a year ago, helped by homebound Americans ordering in.
Technology stocks led the gainers after sinking earlier in the week as investors fretted about signs of rising inflation. Apple, Microsoft, Facebook, Amazon.com and Google’s parent company, Alphabet, rose 1% or more.
Investors have been questioning whether rising inflation will be something temporary, as the Federal Reserve has said, or something more durable that the Fed will have to address. The central bank has kept interest rates low to aid the recovery, but concerns are growing that it will have to shift its position if inflation starts running too hot.
Data from the Commerce Department on Friday showed Americans kept up their share of retail purchases in April, helped by the stimulus checks that have gone out in the last few weeks. However, economists expected retail sales figures to be slightly higher for the month. Sales were up at restaurants and bars in the month, according to the data.
In other economic data, industrial production, which includes output at factories, mines and utilities, rose 0.7% last month, down from a sharp increase of 2.4% in March, the Federal Reserve reported Friday. Auto production fell 4.3% in April, largely because carmakers can’t find enough semiconductors. But the output of computers, electrical equipment and appliances, machinery, and metals such as steel all increased.
Bond yields have risen sharply this week but pulled back slightly Friday. The yield on the 10-year Treasury fell to 1.63% from 1.66% a day earlier.
