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.
John Petrides, Portfolio Manager at Tocqueville Asset Management, joins Cheddar News' Closing Bell, where he breaks down Monday's market activity amid the emergence of the omicron variant, and what it could mean for the Fed's timeline when it comes to raising rates and tapering pandemic aid.
Amid continued volatility due to COVID-19, high inflation, and changing consumer and business behavior, what are investors thinking as we close out the fourth quarter and look ahead to 2022? Hady Farag, Partner and Associate Director at Boston Consulting Group, joins Cheddar News' Closing Bell to discuss what investors are prioritizing, what risks they are watching out for, and more.
Don Basile, CEO, Monsoon Blockchain & Founder of Bitcoin Latinum, joins Cheddar News' Closing Bell, where he explains why we're seeing major crypto investors look to purchase expensive pieces of art, and discusses what the NFT space could look like in the not-too-distant future.
Jack Constantine, chief digital officer and product inventor at Lush, joined Cheddar to talk about the cosmetic company's mass exodus from major social media platforms TikTok, Facebook, Instagram, and Snapchat, in the wake of recent reports that Instagram specifically had negative impacts on teen girls. He noted that with teenage girls being a large part of its consumer base and audience, Lush had a responsibility to market its company on outlets that prioritize mental wellbeing. "For us, we've always been a social brand, and it started to feel that social media was no longer offering what we felt we wanted to gain from it," he said. "And then obviously when you add that to the damage that it's causing, it just feels like a combination that we can't continue on with." The company also pulled out of social media platforms in 2019.
Jon Lowen, Co-Founder of Surfside, joined Wake Up With Cheddar's Baker Machado to discuss Uber's partnership with cannabis retailer Tokyo Smoke, as it's the first time a cannabis merchant has been listed on UberEats across all of its global markets.
Financial Expert Jessica Weaver joined Cheddar's Jill Wagner to discuss some money-saving tips for Americans as inflation and supply chain issues herald the most expensive Thanksgiving meal yet.
Jack Dorsey resigned from his post as CEO of the social media company on Monday and will be replaced by chief technology officer Parag Agrawal. Mitch Rubin, portfolio manager at RiverPark Long/Short Opportunity Fund, joined Cheddar to break down the move and what it means for investors in both Twitter and Square, the payment company that Dorsey also helms. "For the long-term, I think this is very positive news for both companies," he said. Rubin also talked about growing competition in the social media space and why Twitter continues to lag behind other major players.
Friday saw big sell offs, with the Dow Jones posting its worst day since October 2020, falling 905 points, with the Nasdaq and S&P 500 each tumbling more than two percent as well. Much of that due to investor concerns over the new Covid-19 'Omicron' variant first detected in South Africa. Craig Erlam, senior market analyst at Oanda explains what investors should expect this week.
