Stocks post gains as tech stocks lead charge
NEW YORK - Stocks recovered from another stretch of volatile trading and finished strong Friday, led by a push from tech and health care companies. Despite the rally, the S&P still posted its fourth straight weekly loss, extending Wall Street’s September dive.
The index ended the week with a 0.6% loss. This is its first four-week losing streak in more than a year. The index is now down 5.8% for September, despite five straight months of gains prior.
Friday’s rally reflects traders taking advantage of the selloffs to buy up stocks at lower prices, according to David Lyon, a global investment specialist at J.P. Morgan Private Bank.
“You’re getting a market that got close to a 10% correction, so you’re starting to see buyers step in to buy the dip,” Lyon said.
Fund managers tend to change tact toward the end of a quarter to boost their portfolios, another reasonable cause for the Friday buying spree, he said.
The S&P 500 rose 51.87 points to 3,298.46. The Dow Jones Industrial Average gained 358.52 points, or 1.3%, to 27,173.96. The Nasdaq composite climbed 241.30 points, or 2.3%, to 10,913.56.
Stocks struggled this month amidst an uncertain political climate and continued pandemic. Another concern is that stocks may still be too expensive following the record-breaking run throughout the summer.
“This week, and the month of September, is really what we’re calling the give-back month,” Lyon said. “valuations got expensive and this is a natural settling of the market, kind of giving back some of those advance returns that were probably ahead of themselves.”
Traders also drove up shares in cruise lines. Norwegian Cruise Line made the biggest gain among S&P 500 stocks, jumping 13.7%. Carnival and Royal Caribbean Group climbed 9.7% and 7.7% respectively.
Investors’ frustration has also grown over Congress’ inability to deliver aid to the economy after weekly boosts to unemployment benefits and other stimulus packages expired.
The Fed has pledged to continue to hold short-term rates at nearly zero for years, but chair Jerome Powell said in testimony before Congress this week that a speedy recovery will require more help from the government as well.
In Europe stocks closed lower. Germany’s DAX fell 1.1%, and France’s CAC 40 lost 0.7%. The FTSE 100 in London climbed 0.3%.
In Asia, Japan’s Nikkei 225 added 0.5% and South Korea’s Kospi rose 0.3%. Hong Kong’s Hang Seng slipped 0.3%, and stocks in Shanghai fell 0.1%.
The yield on the 10-year Treasury remained at 0.66%.