US Stocks Close Higher; Lower Week 05/14 16:13
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.
(AP) -- 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 S&P 500 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 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.
The market's rally the last two days reflects a mix of traders piling back
into the market, which hit all-time highs just 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.
"It's just jittery markets," said Chris Gaffney, president of TIAA Bank
World Markets. "We're going to continue to see this push-pull between good
growth and reopening and inflation worries, that's what's causing this
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, where 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
growth in subscriber additions to its video streaming service. Disney had been
adding subscribers at a breakneck pace the past year, helped by popular shows
like "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 revenues 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 all 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.
"There's certainly a lot to be happy about in the reopening and earnings
pictures, but at the same time there's a lot to be worried about if inflation,
if these price increases remain and it forces the Fed to act quicker than they
want to," Gaffney said. "That could put a quick halt to the (stock market)
Data from 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 car makers 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 on Friday.
The yield on the 10-year Treasury fell to 1.63% from 1.66% a day earlier.