S&P 500 Ends Week With Gain After Wild Friday
By Joe Wallace and Karen Langley
U.S. stocks closed out a volatile trading week with gains among
cyclical sectors and losses in technology shares as a healing
economy and surge in government-bond yields led investors to
reassess their positioning.
The S&P 500 ended the week with modest gains, as advances by
the energy, financial and industrial sectors weighed against
declines in the technology and consumer discretionary groups. The
tech-heavy Nasdaq Composite, meanwhile, finished the week with a
decline of about 2.1% -- its third consecutive week losing
The Dow Jones Industrial Average, which is less oriented toward
fast-growing technology stocks, enjoyed the largest weekly gain of
the major indexes, about 1.8%.
"This last week has been a classic correction in growth versus
value," said Tom Plumb, president and portfolio manager at Plumb
Funds. "But it doesn't mean that it portends something much
Stocks have stumbled in recent weeks as a climb in bond yields
has called into question whether low interest rates, which
propelled valuations higher for much of the past year, will
continue. Yields, which rise as bond prices fall, have rallied in
response to expectations of a quickening pace of growth and
inflation as the economy reopens from the coronavirus pandemic.
The yield on the 10-year U.S. Treasury note rose again Friday to
1.552%, from 1.547% Thursday, which had been the highest since
February of last year. The recent climb in yields came after
Friday's stronger-than-expected jobs report. Meanwhile, Federal
Reserve Chairman Jerome Powell provided no sign the central bank
would seek to stem the rise when he spoke Thursday at The Wall
Street Journal Jobs Summit.
"It is all about the bond-yield moves. It is all about Jerome
Powell," said Edward Park, chief investment officer at Brooks
Macdonald. "There is a huge amount of uncertainty in the market at
the moment as to whether the inflation that is widely expected in
the short term is transient or whether it is more sustained."
Investors received a shot of promising news about the economy
Friday with the February employment report showing the economy
added 379,000 new jobs last month, ahead of estimates of 210,000.
The unemployment rate was 6.2%, versus the consensus of 6.3%. Those
figures add to signs of a slow improvement in the labor market,
after data on Thursday showed filings for unemployment benefits
reached their lowest level in three months.
But stocks wavered during Friday's trading, with the Dow Jones
Industrial Average swinging nearly 700 points from its low to its
"There's volatility to be expected, especially after we've had a
bit of a selloff, a bit of a rocky week," said Cliff Hodge, chief
investment officer at Cornerstone Wealth. "It's not surprising that
we're bouncing around. People are looking for direction."
The S&P 500 rose 1.95% on the day, while the Dow Jones
Industrial Average advanced 1.9%, or about 573 points. The Nasdaq
Composite added 1.55%.
Technology stocks have borne the brunt of the shift in sentiment
in recent weeks. Tesla shares, for example, are off 32% from their
Jan. 26 record after falling 3.9% Friday. Shares of the
electric-vehicle maker have fallen in six of the past seven trading
Energy stocks, by contrast, have surged in the new year and are
leading the S&P 500's 11 sectors. The group was on pace to end
the week up 9.8%.
Oil prices rallied for a second day Friday after OPEC and a
Russia-led coalition of oil producers kept most of their production
cuts in place, taking the market by surprise. Brent crude rose 3.9%
to $69.36 a barrel. The cartel's decision will push the
international energy benchmark to $75 a barrel in the second
quarter and $80 in the third, analysts at Goldman Sachs Group
Overseas, the pan-continental Stoxx Europe 600 ticked down 0.8%
Friday. Major Asian indexes also declined. Japan's Nikkei 225
ticked 0.2% lower, while Hong Kong's Hang Seng Index dropped
Write to Joe Wallace at Joe.Wallace@wsj.com and Karen Langley at
(END) Dow Jones Newswires
March 05, 2021 16:18 ET (21:18 GMT)
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