Pedestrians pass the New York Stock Exchange, Wednesday, Jan. 27, 2021, in New York. Stocks are inching higher in early trading on Wall Street Friday, Aug. 20, but not enough to erase their losses from the week. (AP Photo/John Minchillo, File)
By Alex Veiga
Technology companies led stocks broadly higher on Wall Street Friday, though the gains were not enough to erase the market's losses from earlier in the week.
The S&P 500 index rose 0.8%, but still posted a weekly loss of 0.6% after two weeks of gains. Even so, the benchmark index is less than 1% from the all-time high it set Monday.
More than 80% of S&P 500 companies notched gains, including tech sector stocks. Microsoft rose 2.6% and chipmaker Nvidia gained 5.1% for the biggest gain in the index. A mix of companies that rely on consumer spending and communications stocks also made up a big share of the rally. Energy stocks also rose, despite another decline in the price of U.S. crude oil. Treasury yields mostly rose.
Investors turned cautious this week following some disappointing economic reports on retail sales, housing and consumer sentiment. Escalating coronavirus infections across the U.S. and around the globe due to the highly contagious delta variant have also given traders reason to pause with the market near all-time highs.
“Today was the first day that the market didn’t have to deal with disappointing economic data,” said Willie Delwiche, investment strategist at All Star Charts. “We also need to remember it's a Friday in August, not typically an environment where we look for big signals out of the market.”
The S&P 500 rose 35.87 points to 4,441.67. The Dow Jones Industrial Average added 225.96 points, or 0.7%, to 35,120.08. The Nasdaq composite picked up 172.87 points, or 1.2%, to 14,714.66. The Dow and Nasdaq also posted weekly losses.
Small company stocks recovered some of their losses from earlier in the week. The Russell 2000 index added 35.18 points, or 1.7%, to 2,167.60. The index still finished with a 2.5% weekly drop.
Bond trading was quiet. The yield on the 10-year Treasury note rose to 1.26% from 1.24% late Thursday.
With earnings season winding down, investors got to see quarterly report cards from mostly retailers this week. On Friday, Ross Stores fell 2.7%, the biggest decline among S&P 500 companies, after issuing a full-year forecast that fell short of Wall Street’s expectations. Foot Locker jumped 7.3% after blowing past analysts’ forecasts for its latest quarter.
Fund managers aren’t expecting much volatility this month as investors will have little data to work with. August also tends to be a popular time for investors to take vacations, so trading volume typically declines. September tends to be a much more volatile month once Wall Street is back to work.
Still, next week could provide Wall Street with more insight on what the Federal Reserve may do about inflation. Earlier this week, minutes from the most recent Fed meeting showed that officials had discussed reducing the central bank's bond-buying program later this year to start winding down some of the emergency measures that were implemented during the pandemic. But they stopped short of setting a firm timeline.
The Fed's annual conference in Jackson Hole, Wyoming next week could offer hints on when such tapering may begin.
“From a historical perspective, the Fed doesn't make news in its minutes, but it does tend to set out policy shifts at its symposium,” Delwiche said.
After being among the hardest-hit industries by the pandemic, restaurants are still having a hard time staying afloat, with owners claiming that business is worse now due to closures from staff shortages and customer decline than it was three months ago. Mike Whatley, vice president of state affairs and grassroots advocacy for the National Restaurant Association, spoke to Cheddar News about how the sector is reaching out to lawmakers for help. "Working with Senators Wicker, Sinema, and a whole host of bipartisan leaders, we're trying to get the Restaurant Revitalization Fund replenished," Whatley said.
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After reporting record deliveries in Q4, expectations are high for Tesla's Q4 earnings call. Garrett Nelson, senior analyst and VP of equity research at CFRA, joined Cheddar News to discuss predictions about the report and what he sees as the emphasis on the EV maker's future. "We think the focal point of the release is really going to be on their guidance for 2022, the timing of the ramp-up of their new factories in Texas and Germany in the face of these chip shortages and supply chain issues, and also next steps in its long-term growth plans," he noted.
