The tech-heavy NASDAQ index on Friday rallied in choppy trading, even as sentiment remained fragile after the index’s worst performance in four months the day before, as fears of rising inflation kept US bond yields near a one-year high.
The S&P 500 ended little changed, while the Dow closed lower after earlier dropping to a three-week low. However, the Dow still posted gains of nearly 4 percent for the month, as investors bought into cyclical companies set to benefit from an economic reopening.
The NASDAQ, which had its worst week since October last year, ended the month about 1 percent higher, while the S&P 500 posted a monthly gain of about 2.6 percent.
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Shares of Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc on Friday rose from 0.2 percent to 1.4 percent, but had their worst week in months due to a sharp rise in US Treasury yields.
The benchmark 10-year US Treasury yield eased to 1.404 percent after jumping to 1.614 percent on Thursday, roiling stock markets. Wall Street’s fear gauge hovered at a one-month high.
Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when interest rates go up.
“There’s no question that the path in rates today is higher,” 6 Meridian chief investment officer Andrew Mies said.
The Dow Jones Industrial Average dropped 469.64 points, or 1.50 percent, to 30,932.37, the S&P 500 lost 18.19 points, or 0.48 percent, to 3,811.15 and the NASDAQ Composite gained 72.91 points, or 0.56 percent, to 13,192.35.
For the week, the Dow dropped 1.78 percent, the S&P 500 declined 2.45 percent and the NASDAQ lost 4.92 percent.
Financials and energy shares, the best performing S&P 500 sectors this month, slipped 2 percent and 2.3 percent. Technology stocks rose 0.6 percent and semiconductor stocks advanced 2.3 percent.
“There are a few tailwinds for stocks that we shouldn’t lose sight of,” Mies said, citing US President Joe Biden’s US$1.9 trillion economic aid package before the US Congress.
The S&P 500 value index dropped 1.3 percent, while the growth index rose 0.3 percent in a reversal of this month’s trend.
An early surge in the shares of GameStop Corp fizzled and left the video game retailer’s stock down 6.4 percent on Friday, throwing water on a renewed rally this week that has left analysts puzzled.
On the economic front, the latest data showed US consumer spending increased by the most in seven months last month, but price pressures remained muted.
Salesforce.com Inc dropped 6.3 percent as the online software company forecast full-year profit below market expectations.
Volume on US exchanges was 15.54 billion shares, compared with the 15.40 billion average for the full session over the past 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 1.56-to-1 ratio; on the NASDAQ, a 1.73-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and one new low; the NASDAQ Composite recorded 54 new highs and 50 new lows.
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