| |
Wall Street Rallies Friday 07/10 16:32
European stock markets opened higher Friday while Asian prices followed Wall
Street lower on worries economic recoveries might fade as coronavirus cases
increase in the United States and some other countries.
NEW YORK (AP) -- 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 hotpots around the
world. The S&P 500 flip-flopped between a gain and loss through 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.
"So, for the first time in a lot of days we're seeing smaller caps
outperform," said Bob Shea, CEO of TrimTabs Asset Management. "We're seeing
just a kind of mean-reversion day, and they're using the Gilead news to do it."
The week's meandering action was a microcosm of the up-and-down churn that
stocks have been stuck in for a little more than a month. The market's momentum
has stalled since early June, after the S&P 500 roared back to recover most of
an earlier 34% plummet. Massive amounts of aid from central banks and
governments around the world ignited the rally.
"We are dealing with an unprecedented time economically," said Katerina
Simonetti, senior portfolio manager at UBS Private Wealth Management. "We have
to remember that the government support and economic stimulus has been
historically unprecedented. That's a huge deal, and it's going to make a
difference for this market."
It also helped send the S&P 500 to a 1.8% rise for the week, its second
straight weekly gain.
"The market is in a kind of place where good news is a rally and bad news
the Fed's got us,'" said Shea of TrimTabs Asset Management. "That's the win-win
the market has had for the last several weeks."
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 their 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.
Lagging behind the rest of the market were some of the stocks that have been
holding up best this year: big tech-oriented giants. Microsoft dipped 0.3%, and
Apple edged up 0.2%. It's at least a pause for such stocks, which have climbed
through the pandemic this year as investors bet they'll keep growing almost
regardless of the economy's strength.
The yield on the 10-year Treasury, which tends to move with investors'
expectations for the economy and inflation, rose to 0.64% from 0.60% late
Thursday.
In overseas stock markets, European markets climbed after reports showed
industrial production bounced back sharply in some countries.
The CAC 40 in France added 1%, while Germany's DAX returned 1.2%. The FTSE
100 in London gained 0.8%.
Asian markets were more subdued. The Nikkei 225 in Tokyo shed 1.1%, the Hang
Seng in Hong Kong retreated 1.8% to 25,727.41 and the Kospi in Seoul lost 0.8%.
Even Chinese stocks took a break from their torrid run. Stocks in Shanghai
slumped nearly 2% for their first drop in nearly two weeks. They're still up
14.2% over that span.
|
|
