Stocks rebounded on Wall Street on Friday but ended with their worst weekly decline since February. The S&P 500 gained 1.1%, led by companies that would benefit most from a healthy economy. Airlines, hotels and companies hurt by restrictions on travel and other activities were some of the biggest gainers. Merck jumped 8.4% and halved hospitalizations and deaths after it called its experimental pill to treat COVID-19. The yield on the 10-year Treasury fell to 1.47% from 1.52% late Thursday. It was trading at 1.32% a week ago. Oil prices jumped again.
This is a breaking news update. Below is an earlier story from WNN.
US stocks rebounded on Friday, led by companies that would benefit most from a healthy economy, as Wall Street recovered some of its sharp losses from earlier in the week.
The S&P 500 was up 1.1% as of 2:45 p.m. Eastern Time, though trading was choppy again. The index ranged between a 1.4% gain and a 0.6% loss in the first day.
The Dow Jones Industrial Average was up 1.4%, and the Nasdaq Composite was up 0.7%.
Merck helped propel the market and the COVID-19 . jumped 9.6% after calling it its experimental pill to treat halved hospitalizations and deaths. The prospects of an additional tool for overcoming the pandemic helped lift stocks of airlines, hotels and other companies hurt by restrictions on travel and other activities.
United Airlines jumped 7.3%, casino owner Caesars Entertainment 5.5% higher and Live Nation Entertainment 8.1%.
The broad gains of the market were not enough to make up for the gloomy conditions of the past few days. The S&P 500 remains on track for a weekly loss of 2.3%, which would be its worst level since February. A sharp rise in interest rates earlier this week shocked the market and forced a re-evaluation of whether stocks have become too expensive, especially the most popular ones.
On Friday, the yield on the 10-year Treasury fell to 1.47% from 1.52% late Thursday. It is still well above the level of 1.32% a week and a half ago.
September was also the worst month for the S&P 500 since March 2020, when markets fell as the COVID-19 shutdown took hold. Amid weighted concerns on the market: The Federal Reserve is close to shutting down the accelerator on its support for markets, mixed economic data after recent spurt in COVID-19 infections, could increase corporate tax rates And the political turmoil continues in Washington.
Even there high inflation is still engulfing the world. Oil prices rose 2% this week, hitting a seven-year high, while natural gas prices rose more than 7%.
The Federal Reserve has said it expects high inflation to be only fleeting because it is the result of an economy that has come back to life from its earlier shutdown. But if it’s wrong, the Fed may have to raise interest rates earlier or more aggressively than the markets telegraph.
The economic report on Friday was mixed. Country’s construction increased faster than last month, but an August reading of the Federal Reserve’s preferred measure for inflation was slightly higher than forecast. They follow a disappointing report on Thursday in which more people than expected have filed for unemployment benefits.
Such data means “you hear the word ‘stagflation’ come up all at once, which will be the worst outcome,” said Rich Weiss, senior portfolio manager at American Century Investments.
Stagflation occurs when economic growth stagnates but inflation remains high. Weiss doesn’t expect that to happen unless the pandemic causes more global shutdowns, but he’s also not positioning his investments like he’s optimistic about big future gains for stocks.
“We are not swinging on the pitch right now,” he said. “We are neutral.”
Asian stock markets fell on the day despite Japan lifting a pandemic state of emergency and a survey of large Japanese manufacturers Sentiment is showing at a nearly three-year high.
Japan’s Nikkei 225 index fell 2.3% and South Korea’s Kospi fell 1.6%.
European stock indices also fell.
WNN Business Writer Elaine Kurtenbach contributed.