By Anna Hirtenstein

U.S. stocks edged up Friday, on pace to recover some of Thursday's losses, as investors continued to digest reports that President Biden is considering nearly doubling capital-gains taxes on the wealthy.

The S&P 500 ticked 0.4% higher, reversing some of the 0.9% drop that the index suffered on Thursday. Still, the index is on track to end the week lower, which would break a four-week streak of gains.

Technology stocks were among those that helped push the benchmark index higher Friday morning and helped lift the Nasdaq Composite 0.7%. The Dow Jones Industrial Average, meanwhile, traded relatively flat. Those indexes are also on pace for weekly losses.

Stocks have been choppy this week as sentiment wavered between concerns about fresh waves of Covid-19 infections around the world and optimism prompted by promising economic data. Weekly jobless claims last week hit the lowest point since the pandemic began, indicating that the U.S. labor market is improving. Money managers are looking to companies' projections and other key indicators to gauge whether the economic recovery will stay on track and justify high valuations for stocks.

"Data is taking on more meaning," said Georgina Taylor, multiasset fund manager at Invesco. "We've had all the hope built into expectations, but ultimately, we still need earnings to continue recovering, at the same time as we need reassurance that economic data is reflecting those stronger expectations."

Investors on Friday also looked to other encouraging data. U.S. private sector output growth hit a fresh series record in April, IHS Markit said. Similar surveys indicated that Europe is starting to participate in the recovery.

"Expectations are very high for the U.S., we're entering a very strong quarter," said Esty Dwek, head of global market strategy at Natixis Investment Solutions. "The reopening is accelerated, vaccinations have accelerated a lot through March and April. So they will be a confirmation of these very strong trends in the U.S."

In corporate news, Intel declined 6.4% after the semiconductor company on Thursday posted a moderate drop in revenue. The CEO said the global chip shortage could last for another two years. Snap, developer of social-media app Snapchat, jumped 7.9% after reporting a 66% rise in quarterly revenue and strong user growth.

American Express slipped 3.8% after it said its revenue declined, missing analysts' expectations. Personal care and paper products maker Kimberly-Clark fell about 5% after it lowered its guidance for the year, saying that there were near-term challenges after a quarter of supply chain disruptions and higher input costs.

In bond markets, the yield on the 10-year Treasury note ticked up to 1.563%, from 1.554% on Thursday.

Bitcoin fell more than 10% and traded below $50,000, according to data from CoinDesk. The cryptocurrency has been dropping since last weekend. It had risen above $63,000 and hit a record last week.

"Bitcoin is not immune to reduction in global risk appetite. Biden's latest tax proposal that shook the equity market on Thursday, this put a strain on investor sentiment," said Joel Kruger, a strategist at LMAX Group, a currencies and cryptocurrency exchange. "Short term, because it is an emerging asset that is still trying to find its legs, it is exposed to risk-off events."

Overseas, the pan-continental Stoxx Europe 600 pulled back 0.6%, weighed down by the reports of Mr. Biden's tax plans.

The Shanghai Composite Index rose 0.3%, and Hong Kong's Hang Seng Index added 1.1%. Japan's Nikkei 225 ticked down 0.6%.

India's benchmark stock index declined 0.4%, shedding 2% for the week. The country reported the world's biggest daily jump in Covid-19 cases on Thursday.

-- Caitlin McCabe contributed to this article.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

(END) Dow Jones Newswires

April 23, 2021 10:25 ET (14:25 GMT)

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