US stocks rose on Friday, led by technology stocks and store reopenings, as Wall Street bounced back from heavy losses for a second day earlier this week.
The Dow Jones Industrial Average rose 360.68 points, or nearly 1.1%, to 34,382.13. The S&P 500 gained 1.5% to 4,173.85. The tech-heavy Nasdaq Composite, the week’s relative underperformer, fell 2.3% to 13,429.98.
The top averages saw a roller coaster week in which the blue-chip Dow fell nearly 1,200 points Monday through Wednesday. The S&P 500 and Nasdaq fell 4% and 5% respectively over the period. The indices have since bounced back from the steep sell-off, but still posted slight losses for the week as inflation fears weighed on sentiment. The Dow and S&P 500 both fell more than 1% this week, while technology stocks were particularly hard hit, dragging the Nasdaq down over 2.3% for the week.
“The decline this week has been a good thing,” said Tony Dwyer, chief marketing strategist at Canaccord Genuity. “There has to be a correction in the summer that is significant enough to remove the extremely overbought condition and the excessive optimism over the medium term.”
Tech stocks were the biggest outperformers on Friday. Tesla gained more than 3%. Facebook rose 3.5% while Alphabet and Microsoft grew more than 2%. Apple, Amazon and Netflix also rose over 1%.
Disney stocks bucked the trend. The company, which posted weaker-than-expected sales and recorded subscribers to streaming offers, closed 2.6%.
The stocks, which were hardest hit by the ongoing rebound, rose again on Friday after the Centers for Disease Control and Prevention eased guidelines. In most cases, fully vaccinated people do not need to wear masks indoors or outdoors.
United Airlines and American Airlines both rose more than 5%. Carnival and Norwegian Cruise Line stocks both rose more than 8%, while Royal Caribbean rose more than 7%.
The market’s volatility this week is due to the fact that economic data is pointing to inflation. The consumer price index rose by 4.2% year-on-year in April. This was the fastest level since 2008. This has raised fears that the Federal Reserve may be forced to revoke its accommodative monetary policy.
Shares rose on Friday even after data showed consumer buying slowed last month. Retail sales were flat in April, the trading department reported on Friday. This compared to the Dow Jones estimate of a gain of 0.8% and a gain of 9.8% in March.
Still, the earnings season was stronger than expected, and some believe this bull market has more leeway and should benefit investors from slumps.
“The turnaround is strong enough to keep markets rising even as bond yields rise in anticipation of the central bank tightening,” said Robert Buckland, equity strategist at Citi, in a note. “So buy short-term dips, as we may see now. There is a time to be more careful, but that might be next year, not this.”
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