US stocks move higher but are still headed for a weekly loss
Stocks were higher in afternoon trading Friday, though the gains were not enough to erase the market’s losses from earlier in the week
SINGAPORE — Stocks were broadly higher on Wall Street in afternoon trading Friday, though the gains were not enough to erase the market’s losses from earlier in the week.
The S&P 500 index was up 0.7% as of 2:39 p.m. Eastern, but on pace for its first weekly loss in three weeks. The Dow Jones Industrial Average was 0.5% higher, while the Nasdaq composite rose 1%. Both indexes were also headed for weekly drops.
Technology companies led broad gains for benchmark S&P 500. Microsoft rose 2.7% and chipmaker Nvidia was up 5.2%. Communications, health care and financial stocks also accounted for a big share of the gains. Energy stocks were higher, despite another pullback in energy prices.
Small company stocks also rose, sending the Russell 2000 index 1.5% higher. The index is still down 2.7% for the week.
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 other potential issue keeping stocks held back is inflation. Earlier this week, minutes from the most recent Federal Reserve meeting showed that officials had discussed reducing the Fed’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.
The S&P 500 is down 0.6% for the week. Even so, the index remains within 0.1% of its all-time high set on Monday.
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 month for investors to take their vacations, so trading volume typically declines. September tends to be a much more volatile month once Wall Street is back to work.
With earnings season winding down, mostly retailers are now reporting results. Ross Stores fell 3%, 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 7.9% after blowing past analysts’ forecasts for its latest quarter.
Bond trading was quiet. The yield on the 10-year Treasury note rose to 1.26% from 1.24% late Thursday.
