Stocks rose Friday, closing sharply higher even amid a surge in coronavirus cases overseas and concerns over prospects of fiscal stimulus in the US.
The Dow rose more than 350 points, or 1.3%, by market close, led by gains in Boeing and Apple shares. The Nasdaq’s more than 2.2% advance was its biggest since Sep. 9, as tech stocks shook off some of their recent declines. The gain sent the Nasdaq to its first weekly gain following three straight weekly losses, though the S&P 500 and Dow extended their losing streaks to a fourth week.
In equity markets, the three major US indices’ jump on Friday and modestly higher closes on Thursday belied an ongoing bout of volatility in equity markets over the past several weeks, as concerns around the pandemic, election, pace of economic recovery and doubts over a next round of fiscal stimulus piled up. New weekly jobless claims reported Thursday totaled a worse-than-expected 870,000, signaling still more pressure on the labor market, in absence of ongoing relief programs from Washington. House Democrats are reportedly working on a $2.4 trillion stimulus plan, which would be down from the more than $3 trillion they had previously pursued, but a sum still well above the closer to $1 trillion proposal Senate Republicans had suggested they might accept.
Monetary policymakers, for their part, have doubled down on suggestions for more Congress to pass another legislative relief package, though the window of opportunity for such legislation to pass ahead of the presidential election continues to narrow. Federal Reserve Bank of Boston President Eric Rosengren told Yahoo Finance’s Brian Cheung on Thursday that while the central bank could increase asset purchases to try and support the economy, he was “not sure it would be nearly as supportive, for example, as fiscal policy.”
Taken together, the myriad concerns have manifested in a jump in volatility in stocks, with the Dow having swung by more than 550 points between the highs and lows of Thursday’s session. The S&P 500 briefly dipped into corrective territory at the lows of Thursday’s session, falling more than 10% from its recent closing high from Sep. 2 before recovering some losses to close higher.
“We’re in an in-between phase. And when we look back at what happened in June and July, where we went through a sort of corrective process as well, it took a while for the market to really find footing and it took some more meaningful catalyst,” Matt Orton, Carillon Tower Advisers director and portfolio specialist, told Yahoo Finance. “Right now there aren’t that many catalysts outside of gathering more and more uncertainty. So when we talk to clients, I tend to describe this period as a little bit of indigestion for the market.”
“We’ve shot up really, really far. We’ve just [gone] through a little bit of a corrective process, taking out some of the froth from the really high-flying performers in the information technology space,” he added. “And right now with an absence of many catalysts as we head into earnings season, we’re likely going to continue to move sideways.”
4:03 p.m. ET: Stocks close higher, Nasdaq surges by most in two weeks
Here’s where equity markets settled at the end of regular trading on Friday:
S&P 500 (^GSPC): +51.87 points (+1.6%) to 3,298.47
Dow (^DJI): +358.71 points (+1.34%) to 26,174.15
Nasdaq (^IXIC): +241.29 points (+2.26%) to 10,913.56
3:14 p.m. ET: Investors shake off virus, stimulus concerns as stocks climb
The three major indices extended gains Friday afternoon with less than an hour left in the regular session.
The S&P 500 rose 1.6%, led by gains in the information technology and industrials sectors, while the materials, energy and consumer staples sectors lagged. The Nasdaq outperformed as tech stocks rose further, sending the index more than 2% higher.
The Dow rose more than 350 points, or 1.4%, as Boeing surged more than 5.5%, and Apple jumped 3.5%.
11:41 a.m. ET: Stocks hold in slightly positive territory
Here were the main moves in markets, as of 11:41 a.m. ET:
S&P 500 (^GSPC): +19.01 points (+0.59%) to 3,265.60
Dow (^DJI): +97.33 points (+0.36%) to 26,912.77
Nasdaq (^IXIC): +120.88 points (+1.13%) to 10,793.08
Crude (CL=F): -0.25 points (-0.62%) to $40.06 a barrel
Gold (GC=F): -$11.00 (-0.59%) to $1,865.90 per ounce
10-year Treasury (^TNX): -1 bps to yield 0.654%
9:45 a.m. ET: Costco shares drop as Covid-19 costs rise, outweighing strong Q4 results
Costco (COST) shares opened lower Friday despite reporting better-than-expected fiscal fourth quarter results after market close on Thursday. Adjusted earnings were $3.13 per share on revenue of $53.38 billion, with the top line figure rising 12% over last year and accelerating from the previous quarter. Consensus analysts had been looking for $2.85 per share on revenue of $52.5 billion.
However, Costco also reported an increase in Covid-19 related expenses. Incremental pre-tax expenses were $281 million in Costco’s fourth quarter, due to higher wages and sanitation costs. Shares of Costco were down more than 2% around 9:45 a.m. ET.
Still, the company pointed to encouraging consumer trends during its earnings call Thursday evening. Chief Financial Officer Richard Galanti said the company was “a little surprised by the strength” they’ve seen in discretionary, non-food categories, including home improvement items and big-ticket purchases.
9:32 a.m. ET: Stocks open mixed, equities struggle for direction
The three major indices opened mixed on Friday, with the S&P 500 and Dow slightly lower, and the Nasdaq slightly positive. The Dow fell by fewer than 100 points, as more than 1% declines in each of Goldman Sachs, Chevron and Dow Inc. outweighed gains in Boeing and Microsoft.
The energy, materials and utilities sectors lagged in the S&P 500, while the real estate, Amazon-heavy consumer discretionary and information technology sectors outperformed.
8:30 a.m. ET: Durable goods orders sharply miss expectations in August
Orders for big-ticket items rose by a much smaller than expected margin in August, as a slowdown in the pace of the economic recovery broadened out to the manufacturing sector.
US durable goods orders rose just 0.4% in August following an upwardly revised 11.7% surge in July, according to preliminary monthly Commerce Department data Friday morning. This was well below estimates for a 1.5% rise, according to Bloomberg consensus data.
The decline was owed largely to a 4.0% slide in motor vehicles and parts. Defense aircraft and parts orders also sank by 6.4%. Excluding transportation, durable goods were still up 0.4%, in August over July, versus a 1.0% increase in this metric expected.
Core capital goods orders – a proxy for business investment plans that exclude defense orders and aircraft – did rise by a better than expected 1.5% in August. This followed a 2.8% gain in July, and topped estimates for a 0.8% rise.
7:27 a.m. ET Friday: Stocks point to a lower open amid Covid-19 jitters
Here were the main moves in markets, as of 7:27 a.m. ET Friday:
S&P 500 futures (ES=F): 3,214.75, down 23.25 points or 0.72%
Dow futures (YM=F): 26,492.00, down 223 points or 0.83%
Nasdaq futures (NQ=F): 10,845.50, down 46.25 points, or 0.42%
Crude (CL=F): -$0.48 (-1.19%) to $39.83 a barrel
Gold (GC=F): -$18.20 (-0.97%) to $1,858.70per ounce
10-year Treasury (^TNX): -0.3 bps to yield 0.661%
6:03 p.m. ET Thursday: Stock futures open slightly higher
Here were the main moves in equity markets, as of 6:30 p.m. ET Wednesday:
S&P 500 futures (ES=F): 3,247.25, up 9.25 points or 0.29%
Dow futures (YM=F): 26,815.44, up 52.31 points or 0.2%
Nasdaq futures (NQ=F): 10,934.00, up 42.25 points, or 0.39%