Stocks Trim Weekly Losses With Friday Gains
U.S. stocks ended higher Friday after a punishing week of losses across major indexes.
Traders welcomed a reprieve from the brutal spring selloff that has left virtually no corner of the market unscathed. This week brought several shocks for the market. Data showed inflation is still running hot, disappointing investors. Cryptocurrencies swooned after a so-called stablecoin unexpectedly crashed. The S&P 500 on Thursday flirted with bear market territory, a level 20% lower than a recent high, and the Dow Jones Industrial Average posted weekly losses for the seventh consecutive week, its longest losing streak since July 2001.
The Nasdaq Composite jumped 434.04 points, or 3.8%, to 11805.00, its largest one-day percentage gain since November 2020. The S&P 500 gained 93.81 points, or 2.4%, to 4023.89, while the Dow industrials rose 466.36 points, or 1.5%, to 32196.66. All three indexes finished below highs seen earlier in the session.
The moves higher followed a late-session rally Thursday that helped the Nasdaq Composite eke out a gain. Risk-on sentiment carried into international stock markets overnight. By Friday morning in the U.S., investors were scooping up shares of beaten-down technology companies before the opening bell.
Even with Friday’s gains, all three major indexes finished the week with losses of at least 2%. The S&P 500 fell 2.4%, while the Nasdaq Composite lost 2.8%, their sixth consecutive weekly declines. The Dow industrials dropped 2.1%.
Traders and investors were unwilling to call a bottom.
“Will this week be the low for the year? I doubt it,” said
Andrew Slimmon,
senior portfolio manager at Morgan Stanley Investment Management. “I wouldn’t be surprised if we get a deeper growth scare sometime this summer.”
Investors are currently confronting issues not seen in decades as inflation continues to hover near a four-decade high. Many traders believe a recession is increasingly likely as the Federal Reserve attempts to get pricing pressures under control. Many institutional and individual investors alike have begun to discount the idea that the Fed can engineer a so-called soft landing, during which inflation falls but unemployment stays low and the economy keeps growing.
Though Mr. Slimmon said he believes there is more short-term pain in store for stocks, he remains optimistic in the longer term, and said he thinks the market will rebound by the end of the year, citing some fairly upbeat earnings reports. More than three-quarters of S&P 500 companies have reported a positive earnings-per-share surprise for the first quarter, in line with prior quarters, according to FactSet.
“I spend a ton of time talking to companies and listening to company conference calls, and what I can tell you is I don’t hear collectively the weakness out of companies that I’m seeing in the stock market,” said Mr. Slimmon said.
On Thursday, Fed Chairman
Jerome Powell
acknowledged that getting inflation…
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