Wall Street breaks 7-week losing streak, longest since 2001 | News, Sports, Jobs
NEW YORK (AP) — Tech companies led a broad rally for stocks on Friday as Wall Street recorded its best week in 18 months. The gain ended a seven-week losing streak for the market, the longest such streak since 2001.
The S&P 500 rose 2.5% and ended up 6.6% for the week, its best weekly gain since November 2020. The Dow Jones Industrial Average rose 1.8% and the Nasdaq, rich in technologies, gained 3.3%.
The strong weekend came as investors received some potentially encouraging inflation news. The Commerce Department said inflation rose 6.3% in April from a year earlier, the first slowdown since November 2020 and a sign high prices may finally be moderating, at least for now .
The report was released as Wall Street searches for any signals that inflation could decline, while trying to determine how much stocks could fall.
“At this point, that’s all the market needs,” said Ross Mayfield, investment strategy analyst at Baird. “That’s definitely one of the signs you would want to see.”
The S&P 500 ended up 100.40 points at 4,158.24. The Nasdaq gained 390.48 points to 12,131.13. It was the third straight gain for both indexes. The Dow Jones rose 575.77 points to 33,212.96, its sixth consecutive gain.
Small company stocks also gained ground. The Russell 2000 rose 49.66 points, or 2.7%, to 1,887.90.
The market as a whole has been in free fall for nearly two months as worries about inflation and rising interest rates mount. Investors were spooked last week by disappointing reports from major retailers, including Walmart and Target, which stoked fears that rising inflation would hurt profit margins and curb consumer spending.
Trading remained choppy throughout the week, although the market mostly pushed higher as retailers including Macy’s and Dollar General released encouraging earnings reports and financial updates.
Retailers were among the biggest winners on Friday as investors continued to scrutinize the latest round of earnings to get a better sense of the pain rising inflation is inflicting on businesses and consumers. Beauty products company Ulta Beauty jumped 12.5% for the biggest gain in the S&P 500 after raising its profit forecast for the year. Amazon rose 3.7%.
Financial updates and disappointing results weighed on several companies. Clothing retailer American Eagle fell 6.6% after reporting weak first-quarter profits.
Inflation is at its highest level in four decades and is constantly weighing on businesses. Rising costs prompted companies to raise prices for everything from food to clothing to protect their margins and consumers remained resilient. Russia’s invasion of Ukraine has worsened the inflation picture by pushing global energy and food prices even higher.
U.S. crude oil prices were relatively flat, but are up almost 60% in 2022. Wheat prices are up about 50% and corn prices are up 30% this year.
Supply chain problems at the heart of rising inflation have worsened following China’s lockdown of several major cities.
The added pressure of inflation has made it even more difficult for businesses to offset costs and appears to be driving consumers to switch from big-ticket items to basic necessities. It also raised concerns that the Federal Reserve could find it even harder to try to temper the impact of inflation.
The Fed is aggressively raising interest rates to fight inflation, but investors fear it could push the economy into a recession if it acts too aggressively.
The 10-year Treasury yield, which helps set mortgage rates, slipped to 2.74% from 2.75% Thursday night.