Stocks Poised for Modest Weekly Gains
By Avantika Chilkoti and Alexander Osipovich
U.S. stocks climbed Friday as investors brushed off worries
about a fresh wave of coronavirus infections and its impact on the
The Dow Jones Industrial Average advanced 285 points, or 1.1%,
in afternoon trading, after a wobbly start. The S&P 500 rose
0.7%, and the technology-heavy Nasdaq Composite ticked up 0.3%.
All three indexes are poised to close the week with gains. So
far, investors have largely dismissed concerns about the impact of
a fresh wave of Covid-19 infections. New coronavirus cases in the
U.S. repeatedly hit fresh records this week.
Still, the market has remained jittery. Asian stocks sold off
sharply, briefly sending investors rushing to seek shelter in
The yield on the benchmark 10-year U.S. Treasury note fell as
low as 0.571%, its lowest level in more than two months. It bounced
back after the U.S. stock market opened and was recently at 0.630%,
up from 0.605% on Thursday. Bond yields move in the opposite
direction from prices.
"At some stage you accept the reality that Covid hasn't gone
away, that it's going to have an impact on all economies in terms
of social distancing until we have a vaccine," said Brian O'Reilly,
head of market strategy for Mediolanum International Funds.
Markets have been resilient in part because investors expect
further support from the U.S. Federal Reserve if the pandemic
begins to slow the economy again, said Scott Martin, chief
investment officer of Kingsview Wealth Management.
"The market is still largely addicted to stimulus," Mr. Martin
said. "Markets are able to take the coronavirus news in stride
because of this backstop."
Financials were the S&P 500's best performers Friday, rising
3.3% in a sign that risk-seeking investors were snapping up
economically sensitive stocks. Among the largest banks, Citigroup
rallied the most, with its share price jumping more than 6%.
Energy stocks also outperformed, boosted by an uptick in oil
prices. U.S. crude futures rose 2.3% to settle at $40.55 a
Technology and health-care stocks in the S&P 500, which have
performed strongly this year, slipped, both falling about 0.3%.
Shares of Carnival rallied 8.9% after the cruise operator said
it would reduce its fleet by nine ships to conserve cash. United
Airlines Holdings, another stock that has been beaten down by the
pandemic, jumped 8%.
BioNTech, a German biotech firm that has joined with Pfizer to
develop a coronavirus vaccine, rallied after its chief executive
told The Wall Street Journal that early data for its vaccine was
promising and it could seek regulatory approval by the end of the
year. American depositary receipts of BioNTech were recently up
Overseas, European stocks posted gains, with the Stoxx Europe
600 index up 0.9%. Asian markets were mostly lower as China's
recent market rally lost steam.
In China a streak of stock market gains ended Friday, with the
Shanghai Composite Index closing nearly 2% lower. It had risen
16.5% over eight straight sessions of gains, the biggest eight-day
percentage gain since March 2008, according to Dow Jones Market
Perhaps seeking to avoid a repeat of the stock market bubble and
bust of 2015, Chinese authorities have signaled concerns about
overshooting, with a state-run financial newspaper stressing the
importance of long-term investment.
Friday's fall may have been propelled by actions by state-owned
investors. Filings showed that big players such as the National
Council for Social Security Fund had unloaded stocks, according to
Alvin Ngan, strategist at Zhongtai International Holdings, a Hong
"The cooling tone from the authorities could take some of the
sheen off the frenetic market, " he said.
Xie Yu contributed to this article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com and
Alexander Osipovich at firstname.lastname@example.org
(END) Dow Jones Newswires
July 10, 2020 15:26 ET (19:26 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.