All three major averages closed on Friday, rebounding from losses in the previous session amid concerns about a slowdown in global economic growth.
The Dow Jones Industrial Average rose 448.23 points, or 1.3%, to a record close of 34,870.16. The S&P 500 rebounded about 1.1% to close on an all-time high of 4,369.55. The technology-heavy Nasdaq Composite rose just under 1% to close with a record 14,701.92.
The S&P 500 hit its sixth week with gains in seven.
The comeback on Friday brought the averages of all three majors for the week to the green. The Dow rose 0.2% over the course of the week. The S&P 500 and Nasdaq are up 0.4% and 0.4%, respectively, since Monday.
The stocks that led the losses on Thursday, games and banks reopening, posted gains on Friday. Bank of America was up about 3.3%, causing financial stocks to rebound. Royal Caribbean was up 3.6% and Wynn Resorts was up nearly 2%. American Airlines and United Airlines each gained more than 2%.
The small-cap benchmark Russell 2000 gained more than 2% on Friday.
General Motors shares rose 4.8% after Wedbush said the stock was a buy and could rise more than 50% if investors realize the magnitude of technology and electric vehicle development.
Big tech stocks’ gains were capped on Friday when President Joe Biden signed a new executive order targeting the competitive practices of the giants of the sector. Amazon fell 0.3% after hitting a new all-time high on Thursday.
The 10-year government bond yield rebounded 7 basis points to 1.36%, reducing concerns about an economic slowdown (1 basis point equals 0.01%). Falling yields have puzzled investors lately as the 10-year yield fell to its 1.25% low on Thursday.
Thursday’s losses, which saw the Dow drop nearly 260 points, were due to the spread of the highly contagious Delta-Covid variant also fueling concerns about the global economic comeback. The Olympics announced a ban on spectators for the Tokyo Summer Games when Japan declared a state of emergency to curb the spread of the coronavirus.
“Our main argument was for a troubled July,” with the S&P 500 falling to 4,100, wrote Tom Lee, Head of Research at Fundstrat, in a customer note on Thursday evening. “While this is a possibility, we think there is a chance [Thursday] marked the climax of [the] “Fear of growth” and if that’s correct, stocks could shift towards broader risk. “
In addition, the latest unemployment claims report released Thursday indicated a potential slowdown in the labor sector.
“The market is in the solid mid-cycle with typically a 10-15% correction in the index level. We expect such a correction to create buying opportunities in a still strong growth environment,” said Mike Wilson, US equity strategist from Morgan Stanleyley customers. Wilson prefers Financials, Healthcare, and Commodities.