U.S. stocks closed sharply higher on Friday to end a volatile week as hopes of a faster economic recovery lifted investors’ sentiments. The rally was driven once again by reopening stocks. All the three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.4% or 453.40 points to finish at 33,070.88. The blue-chip index had added a meager 65 points earlier in the day before going on a late-session rally.
The S&P 500 advanced 1.7% or 65.02 points to close at 3,974.54 points. The index closed at its record high to register its 2021 gains to 5.8%. Tech, energy and materials sectors were the biggest gainers. The Technology Select Sector SPDR (XLK) and Materials Select Sector SPDR (XLB) and the Energy Select Sector SPDR (XLE) each jumped 2.5%. Ten of the 11 sectors of the benchmark index closed in the green.
The tech-heavy Nasdaq added 1.2% or 161.04 points to end at 13,138.72 points. Major tech stocks bounced back from a low to finish the day in green. Shares of Netflix, Inc.
NFLX
gained 1%, while Apple, Inc.
AAPL
added 0.5%. Apple has a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The fear-gauge CBOE Volatility Index (VIX) was down 4.8% to 18.86. A total of 12.23 billion shares were traded on Friday, lower than the last 20-session average of 13.67 billion. Advancers outnumbered decliners on the NYSE by a 3.30-to-1 ratio. On Nasdaq, a 1.81-to-1 ratio favored advancing issues.
Investors’ Gain Confidence at Last
Markets bounced back in the final minutes of trading on Friday with all the three major indexes finishing in positive territory. Tech stocks which were taking a beating also bounced back to end the day in green. The final eight minutes of trading also saw energy, financial and materials making big gains.
One of the major reasons behind the sudden rally was President Joe Biden’s announcement on Thursday, wherein he said that the United States will aim to have 200 million COVID-19 vaccinations within his first 100 days in office. This raised hopes of a faster economic recovery with the reopening stocks going on a rally.
Financial Stocks Gain
On Friday, the Fed announced that it might soon lift income-based restrictions on bank dividends and resume buybacks. This also somewhat eased fears of rising inflation. The 10-year Treasury yield rose 1.66% but was lower than the 1.75% spike last week, leading o a selloff on fears of rising inflation and that the Fed could increase rates. Friday’s announcement gave investors somewhat clarity about the future thus sending bank stocks on a rally.
Economic Data
Data released on Friday showed consumer sentiment continued to rise last month. According to the University of Michigan survey, consumer confidence rose to 84.9 in March from a reading of 76.8 in February, reaching its highest level in a year.
However, consumer spending declined in February after rebounding in January. The Commerce Department said that consumer spending, dropped 1% in February, due to a decline in purchases of goods. Also, personal income fell 7.1% after increased 10.1% in January.
The personal consumption expenditures (PCE) price index excluding volatile food and energy component increased 0.1% after gaining 0.2% in January, according to the Bureau of Economic Analysis. However, the PCE Price Index climbed to 1.6% on a year-over-year basis.
The annual Core PCE Price Index, excluding volatile food and energy prices, rose to at 1.4% in February, after increasing 1.5% in January.
Weekly Roundup
It was a volatile week that saw investors going for massive selloffs amid fears of inflation. However, the week ended on a high after markets rebounded in the closing minutes on Friday. The Dow and S&P 500 made modest gains of 1.4% and 1.6%, respectively, while the Nasdaq lost 0.6% last week.
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