Wall Street completed a four-session gains streak on Friday, with the Dow Jones Industrial Average closing above 35,000 for the first time after another string of strong gains, helping investors put Monday’s sudden sell-off in the rear-view mirror.
Cautious optimism in light of rising coronavirus cases propelled key benchmarks up in a slow but steady rally, culminating in weekly gains and new intraday highs. Stocks managed to stretch an unlikely 4-day gain streak, with the S&P 500 (^GSPC) and Nasdaq (^IXIC) both adding more than 1% on the day. The Dow (^DJI) closed above the psychologically critical level of 35,000 and rose about 0.7% during the session.
The dizzying reversal of Monday’s beating was part of the market’s attempt to calibrate a resurgence in COVID-19 cases against a red-hot economic expansion that continues to gain momentum.
“What I would say is look both bottom-up and top-down, as the market’s price is currently still in the early stages of recovery,” Deutsche Bank chief strategist Binky Chadha told Yahoo Finance Live on Friday.
Sentiment took a hit after Thursday’s data showed an unexpected jump in unemployment benefit claims, which marked another pandemic-era low last week. The number of new jobless claims rose to 419,000 last week, well above consensus estimates of 360,000.
Since the onset of COVID-19, the dataset has served as an avatar of the health of the labor market and could take on new importance as increasing infections create new restrictions – leading to another round of job losses.
“We don’t expect this new wave to weigh on economic activity, even if hospitalizations continue to rise,” said Paul Ashworth, chief economist in North America at Capital Economics.
“But there is now a risk that other states will be affected, even those with higher vaccination rates, which could have more serious economic consequences,” he added.
On Friday, investors digested data on services and manufacturing underlining the strength of the economy, but revealed the sector was growing at a more moderate pace than expected. Markit’s preliminary US Manufacturing PMI for July came in at a lower-than-expected 59.7 from 63.7 in the previous month. A reading above 50 indicates growth.
Strong gains have helped the market heal from Monday’s pandemic-inspired collapse, with investors looking to fundamentals rather than rising coronavirus numbers. Investors will now look ahead to the Federal Reserve’s policy-making meeting, where the central bank may hint at phasing out asset purchases and reiterate the outlook for rising inflation.
This week, industry experts Netflix (NFLX), Chipotle (CMG), Coca-Cola (KO), Johnson & Johnson (JNJ), and Verizon (VZ) beat market expectations, boosting a market that has seen little in recent months. seen a disadvantage.
On Thursday, Intel (INTC) Twitter (TWTR), Snap (SNAP) – Snapchat’s parent company Southwest (LUV) and AT&T (T) joined the brigade of better-than-expected earnings results, with both companies bolstered by rising demand after the lockdown.
Monday’s sell-off was briefly spotlighted by the quarterly results that almost uniformly reflected a strong recovery. The rising number of cases driven by the Delta variant – a more transmissible form of COVID-19 – pushed the Dow (^DJI), Nasdaq (^IXIC) and S&P 500 (^GSPC) to their biggest drop in months.
However, the signals from the bond market are decidedly less enthusiastic. Analysts have pointed out that safe-haven government bond yields have benefited most from COVID-19 fears, after rising amid inflation fears in recent weeks.
It suggests investors may be parking cash in bonds because they’re itching about inflation or declining, or they feel weakness on the horizon — whether or not caused by the stubborn persistence of COVID-19.
4:01 p.m. ET: Stocks close tumultuous week with a high
Here’s where the key benchmarks ended the session:
S&P500 (^ GSPC): 4,411.78, +44.30 (+1.01%)
dow (^DJI): 35,061.55, +238.20 (+0.68%)
Nasdaq (^IXIC): 14,836.99, +152.39 (+1.04%)
rough (CL=F): $72.03 per barrel, +0.12 (+0.17%)
Gold (GC=F): $1,801.60 per ounce, -3.80(-0.21%)
10-year treasury (^TNX): +0.21 bp yield 1.2860%
12:15 a.m. ET: Stocks Hold Gains, S&P Sets Marginal New Record
Here’s where the prices stood at noon ET:
S&P500 (^ GSPC): 4,404.09, +36.61 (+0.84%)
dow (^DJI): 35,028.45, +205.10 (+0.59%)
Nasdaq (^IXIC): 14,801,86, +117.27 (+0.80%)
10:00 a.m. ET: Data: Manufacturing, services feel supply squeeze overhang
US business activity grew at a moderate pace for the second consecutive month in July amid supply constraints, signaling a slowdown in economic activity after what was expected to have been a robust second quarter. IHS Markit’s flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, fell from 63.7 in June to a four-month low of 59.7.
9:50 a.m. ET: Chinese stocks hammered amid government crackdown
A man looks at the Pudong financial district in Shanghai, November 20, 2013. With a shift in tone and language, China’s central bank governor has let the prospect of accelerating currency reform and giving markets more room to determine the yuan’s exchange rate dangle, as he underlines. broader plans for profound economic change. The central bank under Zhou Xiaochuan has consistently expressed its intent to liberalize financial markets and allow the yuan to trade more freely, even before the Communist Party summit late last week unveiled its boldest set of economic and social reforms in nearly three decades. REUTERS/Carlos Barria (CHINA – Tags: BUSINESS CITYSCAPE TPX IMAGES OF THE DAY)
Investors are taking the wood to Chinese stocks in the wake of Beijing’s move to exert more control over publicly traded companies. The sector has been under increased scrutiny since the Chinese government put the hammer down on Didi, who is being threatened with increased penalties. The stock is down in early trading, falling more than 17% on the day and more than 50% below its 52-week high.
9:30 a.m. ET: Stocks Pop the Opening Bell
Here are the markets from 9.30am:
S&P500 (^ GSPC): 4,387.10, +19.62 (+0.45%)
dow (^DJI): 35,038.02+214.67(+0.62%)
Nasdaq (^IXIC): 14,699.16, +14.56 (+0.10%)
rough (CL=F): $71.82, -0.09 (-0.13%)
Gold (GC=F): $1,802.10 per ounce, -$3.30(-0.18%)
10-year treasury (^TNX): +4.1 bps for 1.312% yield
7:15 a.m. ET Friday: Stock futures remain in the green
These were the key moves in the markets as of 7:15 a.m. Eastern:
Dow futures (YM=F): 34,873.00, +164.00, (+0.47%)
Nasdaq futures (NQ = F): 15,001.75,+73.25 (+0.49%)
S&P 500 futures (ES = F): 4,380.75, +21.25 (+0.49%)
7:21 PM ET Thursday Night: Stock Futures Gains
Here are the main moves in the markets as of 7:21 PM ET:
Dow futures (YM=F): 34.765, +56
Nasdaq futures (NQ = F): 14,975, +47.75
S&P 500 futures (ES = F): 4.370, +10.25
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Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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