Stocks Recover Some of Thursday's Losses
By Anna Hirtenstein and Caitlin McCabe
Investors piled back into equity markets Friday, lifting all
three major U.S. stock indexes, as fresh data underscored that a
strong economic recovery is under way.
The S&P 500 jumped 0.9% in recent trading, while the
technology-heavy Nasdaq Composite added 1.3%. The Dow Jones
Industrial Average added about 160 points, or 0.5%.
The gains marked a sharp turnaround from Thursday, when U.S.
stocks tumbled on reports that President Biden is considering
nearly doubling capital-gains taxes on the wealthy. The news --
which sent major indexes falling almost immediately -- added to
what was already a choppy week for the U.S. stock market.
All three indexes are still on track to end the week with
losses, which would break a weekslong winning streak for each.
Still, strong data released Friday offered investors some optimism,
helping propel gains for the day.
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.
Meanwhile, data from the Commerce Department showed sales of new
single-family homes in March rose more than 20% compared with
February. The figures beat estimates from economists surveyed by
The Wall Street Journal.
"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."
Before Friday, stocks had been choppy this week, in part, due to
concerns about fresh waves of Covid-19 infections around the world.
Money managers are also looking to companies' projections and other
key indicators to gauge whether the economic recovery will stay on
track and justify high valuations for stocks.
"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
All 11 sectors of the S&P 500 traded higher Friday. 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 3.5% after reporting
a 66% rise in quarterly revenue and strong user growth.
American Express slipped 2.2% after it said its revenue
declined, missing analysts' expectations. Personal care and paper
products maker Kimberly-Clark fell about 5.3% 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
In bond markets, the yield on the 10-year Treasury note ticked
up to 1.564%, 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
"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
Overseas, the pan-continental Stoxx Europe 600 pulled back
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.
Write to Anna Hirtenstein at email@example.com and
Caitlin McCabe at firstname.lastname@example.org
(END) Dow Jones Newswires
April 23, 2021 12:09 ET (16:09 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.