Written by ALEX VEIGA-AP Business Writer
Stocks closed higher for the second day in a row but still ended with a weekly loss after three sizable drops earlier in the week. The S&P 500 added 1.5% Friday, but still lost 1.4% for the week. Another bounce back in tech shares pushed the Nasdaq 2.3% higher. Disney fell 2.6% after reporting lower revenue and missing forecasts for growth in subscriber additions to its video streaming service. Retailers, banks, communication companies and industrial stocks also helped lift the market. Energy stocks also rose as the price of U.S. crude oil climbed 2.4%. Treasury yields mostly fell.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks are solidly higher in afternoon trading Friday, though the market is still on track to end the week in the red after three days of steep drops earlier in the week. Investors continue to focus on the possibility of inflation as the U.S. economy recovers from the coronavirus pandemic.
The S&P 500 index was up 1.7% as of 3:18 p.m. Eastern. The Dow Jones Industrial Average was up 1.2% and the Nasdaq Composite, where the losses this week have been steeper, was up 2.5%.
The gains were broad, though technology sector stocks powered much of the rally. Retailers, banks, communication companies and industrial stocks also helped lift the market. Energy stocks also rose as the price of U.S. crude oil climbed 2.4%. Treasury yields mostly fell.
The rally follows a solid finish for stocks Thursday, when the market appeared to get a boost from the Centers for Disease Control and Prevention’s decision to ease mask-wearing guidance for fully vaccinated people, clearing the way for that segment of the population to stop wearing masks outdoors in crowds and in most indoor settings. The move is expected to encourage more people to go out and spend money, speeding up the reopening of the economy.
Even after two days of gains, the major stock indexes are on pace for weekly declines, specifically a 1.2% drop for the S&P 500, a 2.2% decline for the Nasdaq and a 1% pullback for the Dow.
“It’s just jittery markets,” said Chris Gaffney, president of TIAA Bank World Markets. “We’re going to continue to see this push-pull between good growth and reopening and inflation worries, that’s what’s causing this volatility.”
Disney fell 2.4% after reporting lower revenue and missing forecasts for growth in subscriber additions to its video streaming service. Disney had been adding subscribers at a breakneck pace the past year, helped by popular shows like “The Mandalorian” and the pandemic, which kept many Americans at home with little to do except watch TV.
DoorDash vaulted 21.2% after after the company said its revenues tripled from a year ago, helped by homebound Americans ordering in.
Technology stocks led the gainers after sinking earlier in the week as investors fretted about signs of rising inflation. Apple, Microsoft, Facebook, Amazon.com and Google’s parent company all rose 1% or more.
Investors have been questioning whether rising inflation will be something temporary, as the Federal Reserve has said, or something more durable that the Fed will have to address. The central bank has kept interest rates low to aid the recovery, but concerns are growing that it will have to shift its position if inflation starts running too hot.
“There’s certainly a lot to be happy about in the reopening and earnings pictures, but at the same time there’s a lot to be worried about if inflation, if these price increases remain and it forces the Fed to act quicker than they want to,” Gaffney said. “That could put a quick halt to the (stock market) rally.”
Data from Commerce Department on Friday showed Americans kept up their share of retail purchases in April, helped by the stimulus checks that have gone out in the last few weeks. However, economists expected retail sales figures to be slightly higher for the month. Sales were up at restaurants and bars in the month, according to the data.
In other economic data, industrial production, which includes output at factories, mines and utilities, rose 0.7% last month, down from a sharp increase of 2.4% in March, the Federal Reserve reported Friday. Auto production fell 4.3% in April, largely because car makers can’t find enough semiconductors. But the output of computers, electrical equipment and appliances, machinery, and metals such as steel all increased.
Bond yields have risen sharply this week but pulled back slightly on Friday.
The yield on the 10-year Treasury fell to 1.63% from 1.66% a day earlier.