Wall Street surges as cyclical stocks rebound after selloff
U.S. stock indexes rose on Friday as shares of companies that benefit from economic restart including energy firms and banks rebounded after a selloff, helping erase some losses triggered by growth worries earlier in the week.
Ten of the 11 major S&P 500 sector indexes were higher, with a 1.6% rise in financials leading gains. Other economy-sensitive sectors such as industrials and materials also rose about 1.5% each.
The S&P 500 banks index jumped 2.1% as the benchmark 10-year Treasury yield snapped an eight-day losing streak. [US/]
Energy stocks advanced 1.0% but were still set to log a weekly decline of 5%.
Wall Street’s main indexes slid on Thursday, with the S&P 500 and the Nasdaq pulling back from record closing highs as investors flocked to bond markets on concerns that the domestic economic recovery was losing steam.
“The market was at a high point and it needed to pull back a little bit and it did yesterday,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Focus will now shift to second-quarter earnings, with big banks reporting next week. Analysts expect earnings growth of 65.8% for companies in the S&P 500 index in the quarter, up from a previous forecast of 54% growth at the start of the period, according to Refinitiv IBES data.
“Once we enter earnings season, we will expect a sort of cushion for the market … it won’t just be a certain group of companies that are expected to report strong earnings, it will be most sectors of the market,” Cardillo said.
The S&P 500 is set to fall 0.3% for the week, while the Dow was poised for a 0.5% decline. The Nasdaq is set to post a smaller weekly decline of 0.5%, helped by a recent move into growth companies.
At 9:42 a.m. ET, the Dow Jones Industrial Average was up 302.89 points, or 0.88%, at 34,724.82, the S&P 500 was up 23.69 points, or 0.55%, at 4,344.51 and the Nasdaq Composite was up 11.56 points, or 0.08%, at 14,571.35.
The S&P 500 technology sector index dipped 0.1%, with mega-cap growth stocks such as Google owner-Alphabet Inc, Facebook Inc, Apple Inc, Microsoft Corp and Amazon.com trading mixed.
Levi Strauss & Co gained 3.9% as it forecast a strong full-year profit after beating quarterly earnings estimates on improving demand across its markets for jeans, tops, and jackets.
U.S.-listed shares of Chinese ride-hailing company Didi Global Inc rose 4.2% after four sessions of losses as it was recently hit by an investigation from China’s internet watchdog.
General Motors Co firmed 4.0% after Wedbush started coverage of the automaker’s stock with an “outperform” rating.
Advancing issues outnumbered decliners by a 4.51-to-1 ratio on the NYSE and by a 2.04-to-1 ratio on the Nasdaq. The S&P index recorded 21 new 52-week highs and no new lows, while the Nasdaq recorded 15 new highs and 11 new lows.
(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur, Aditya Soni)