Technology shares lift stocks to a late-day surge
U.S. stocks bounced all day Friday before surging to healthy gains the final hour. But the rally was not enough to keep the major indexes from posting their first losing week in the last three.
The Dow Jones industrial average jumped more than 200 points early, but it then ricocheted for several hours before recovering late in the day. The blue chips finished with a 260-point gain, about 1.1 percent, to close at 23,775.27. Boeing, down 6 percent, was the big drag on the Dow, while Home Depot, Apple, IBM and Cisco were bright spots.
The Standard & Poor's 500 index advanced 39 points, 1.4 percent, to close at 2,836..74. All 11 stock sectors were positive. The tech-heavy Nasdaq composite rose 140 points, 1.65 percent, to close at 8,634.52.
European and Asian stocks declined on more bad economic news and on reports that a highly anticipated coronavirus treatment had failed to fulfill expectations.
Markets were turbulent all week due mostly to wild swings in the price of oil. West Texas Intermediate crude, which spiked 40 percent by midweek, had fallen below zero at the start of the week. People who held oil contracts were paying buyers to take the oil contracts.
Investors expect more turbulence as Wall Street heads deeper into earnings season and companies paint a mostly grim, if unpredictable, economic future in the next few months. With so many unknowns surrounding the coronavirus pandemic, businesses large and small are reluctant to predict what revenue and profits might look like.
"Wall Street is looking beyond the second quarter and seeing a possible rebound in the second half of the year," said Howard Silverblatt of S&P Dow Jones Indices. "That explains why stocks aren't worse."
The S&P is up 26 percent from its March 23 bottom. It is on track for its best month since October 2011, though it is down 12.6 percent in 2020.
Meanwhile, the bad new is piling up. Consumer sentiment is the lowest in years, while orders for durable goods and initial jobless applications are at recessionary levels. Retailers Neiman Marcus and J.C. Penney are reportedly preparing to file bankruptcy, and other big retailers are ailing.
Stocks took a hit on Thursday on reports that a coronavirus treatment by drugmaker Gilead had disappointing results from a clinical trial. Gilead later said in a statement Thursday that the document upon which the news report was based contained "inappropriate characterizations" and that the study's findings were "inconclusive." Gilead shares were up 2 percent Friday.
The U.S. oil industry, which a month ago was pumping a record 13.1 million barrels a day, is rapidly reducing production in the face of the epic rout in oil prices due to the global coronavirus lockdown that has shuttered more than 3 billion people.
The good news is that the reduction in oil production should eventually raise crude prices and erase the glut. Companies need around a $40 to $50 per barrel oil price to make money. States are also beginning to ease lockdown curbs, boosting the outlook for more gasoline and jet fuel usage.
"The market is trading on emotion and hope, and not so much on fundamentals," said Chris Detmer, founding partner of the Washington Wealth Group.
