S&P 500 Has Best Day in 2 Years 06/24 16:00
Stocks racked up more gains on Wall Street Friday, as the S&P 500 had its
best day in two years and just its second winning week in the last 12 to
provide a bit of relief from the market's brutal sell-off this year.
(AP) -- Stocks racked up more gains on Wall Street Friday, as the S&P 500
had its best day in two years and just its second winning week in the last 12
to provide a bit of relief from the market's brutal sell-off this year.
The benchmark index rose 3.1%, with technology and banks leading the broad
rally. The S&P 500 notched a 6.4% gain for the week, erasing the brutal loss it
took a week earlier, though it's still close to 20% below its record set early
The Dow Jones Industrial Average rose 2.7% and the tech-heavy Nasdaq ended
3.3% higher. Both indexes also posted a weekly gain that more than made up for
their losses last week.
Stocks rallied this week as pressure from rising Treasury yields lets up
somewhat and investors speculate the Federal Reserve may not have to be as
aggressive about raising interest rates as earlier thought as it fights to
The gains are a reprieve from Wall Street's tumble through most of the year,
caused by the Fed's and other central banks' slamming into reverse on the
tremendous support fed into markets through the pandemic. In hopes of beating
down punishingly high inflation, central banks have raised interest rates and
made other moves that hurt prices for investments and threaten to slow the
economy enough to cause a recession. More such moves are sure to come.
"It has been a good week," said Randy Frederick, managing director of
trading & derivatives at Charles Schwab. "It's rare. At least in 2022, we've
had only a couple of weeks where we ended up net positive. It looks pretty
similar to what we saw right around the end of May, and that one of course
The S&P 500 rose 116.01 points to 3,911.74. The Dow climbed 823.32 points to
31,500.68. The Nasdaq rose 375.43 points to 11,607.62.
Smaller company stocks also rallied. The Russell 2000 rose 54.06 points, or
3.2%, to 1,765.74.
Parts of the U.S. economy are still red-hot, particularly the jobs market,
but some discouraging signals have emerged recently. A report on Friday
confirmed sentiment among consumers sank to its lowest point since the
University of Michigan began keeping records, hurt in particular by high
inflation. Another lowlight this week suggested the U.S. manufacturing and
services sectors aren't as strong as economists thought.
Such weakening data raise worries about the strength of the economy. But
they also can be good for financial markets, as paradoxical as that may seem.
They could mean less upward pressure on inflation, which would ultimately
mean the Federal Reserve doesn't have to raise rates so aggressively. And
interest rates drive trading for everything from stocks to cryptocurrencies.
"We have seen a cooling off in a lot of areas, certainly. Gasoline purchases
are down, housing prices appear to be cooling across the board," Frederick
said. "To me all of this speaks to the fact what the Fed is doing now appears
to at least be having some impact. Now, whether or not it's sufficient to bring
inflation down, I don't think we know yet."
One nugget in the consumer sentiment report could carry particular weight
for markets. It showed consumers' expectations for inflation over the long run
moderated to 3.1% from a mid-month reading of 3.3%. That's crucial for the Fed
because expectations for higher inflation in the future can trigger buying
activity that inflames inflation further in a self-fulfilling, vicious cycle.
Last week, the Fed hiked its key short-term rate by the biggest margin in
decades and said another such increases could be coming, though they wouldn't
Over the last week, investors have been modestly ratcheting back their
expectations for how high the Fed will hike interest rates into early next year.
That's helped yields in the Treasury market recede. The yield on the
two-year Treasury, which tends to move with expectations for the Fed's actions,
dropped back to 3.06% from more than 3.40% in the middle of last week.
The yield on the 10-year Treasury, which forms the bedrock for the world's
financial system, rose to 3.13% on Friday from 3.07% late Thursday. But it also
has moderated after hitting 3.48% last week.
It started the year just a bit above 1.50%.
A separate economic report on Friday showed sales of new homes unexpectedly
accelerated last month. But the trend for housing has largely been lower
because it's at the leading edge of the Fed's hikes.
More expensive mortgage rates are hurting the industry, and a separate
report earlier this week showed sales of previously occupied homes slowed last
Rising mortgage rates pushed LendingTree, the online marketplace that helps
people find mortgages and other loans, to warn Friday that it expects to report
weaker revenue for the second quarter than earlier forecast. Its stock fell
The vast majority of Wall Street was heading the opposite direction. More
than 95% of the stocks in the S&P 500 closed higher.
Travel-related stocks were among the biggest gainers Friday. Cruise operator
Carnival rose 12.4% after it reported weaker results for its most recent
quarter than analysts expected, but also said that booking trends are
improving. Royal Caribbean jumped 15.8% for the biggest gain in the S&P 500.
United Airlines rose 7.5%, while Wynn Resorts climbed 12.1%.