The three major US stock indices rallied to record closing highs on Friday as financials and other economically focused sectors rebounded from a sell-off sparked by growth worries earlier in the week.
The rally allowed the indices to notch slight gains for the week, which also saw a sharp rally in US Treasuries as investors worried the US economic recovery might be losing steam as the Delta variant of SARS-CoV-2 spread globally.
US 10-year Treasury notes fell on Friday, halting an eight-day price rise, while the S&P 500 financials sector jumped 2.9 percent in the sector’s biggest daily percentage gain since March 1.
Financials led sector advances followed by energy, materials and industrials. Big banks, including JPMorgan Chase & Co, are to begin the second-quarter earnings season next week when they report results.
“What an about-face from all of the gloom and doom from yesterday,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“The US is in a bubble compared to the rest of the world, in a break from COVID. How long that’s going to last we don’t know,” he said, but “until that narrative changes, this is a market with a lot of free money and low interest rates.”
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The Dow Jones Industrial Average on Friday rose 448.23 points, or 1.3 percent, to 34,870.16, the S&P 500 gained 48.73 points, or 1.13 percent, to 4,369.55 and the NASDAQ Composite added 142.13 points, or 0.98 percent, to 14,701.92.
For the week, the Dow rose 0.2 percent, and the S&P 500 and NASDAQ each added 0.4 percent.
A big jump in quarterly earnings is expected to mark a peak for US profit growth in the recovery from last year’s COVID-19 pandemic-induced collapse. Investors are looking to US companies’ upcoming quarterly results and forecasts about the recovery in the second half of this year as some worry that the recent economic surge is already waning.
Analysts expect earnings growth of 65.8 percent for companies in the S&P 500 index in the quarter, up from a previous forecast of 54 percent growth at the start of the period, according to Refinitiv IBES data.
Among individual stocks, Levi Strauss & Co rose 1.4 percent as it forecast a strong full-year profit after beating quarterly earnings estimates on improving demand across its markets for jeans, tops and jackets.
US-listed shares of Chinese ride-hailing company Didi Global Inc (滴滴) gained 7.3 percent after four sessions of losses, as it was recently hit by an investigation from China’s Internet watchdog.
Volume on US exchanges was 8.51 billion shares, compared with the 10.5 billion average for the full session over the past 20 trading days.
Advancing issues outnumbered declining ones on the New York Stock Exchange by a 3.77-to-1 ratio; on NASDAQ, a 3.33-to-1 ratio favored advancers.
The S&P 500 posted 44 new 52-week highs and no new lows; the NASDAQ Composite recorded 60 new highs and 32 new lows.
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