The US benchmark S&P 500 stock index has snapped a six-day losing streak with technology stocks recovering after a week of losses and investors looking for bargains ahead of the third quarter earnings reporting season.
Even the hard-hit S&P500 energy and financial sectors managed to close Friday’s session with slight gains after a late afternoon rally.
The S&P technology index gained 3.2 per cent on the day, showing its strongest one-day gain since March 26, although it still registered its biggest weekly drop since March 23.
‘People are starting to buy in, thinking the higher flying growth stocks were oversold. They wanted to get in before next week when earnings start coming,’ said Janna Sampson at OakBrook Investments LLC.
But until the US and China reach a trade deal, the rebound in the stockmarket could be vulnerable as investors are anxious about the impact of tariffs on corporate profits.
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‘If earnings come out good I think this rally is sustainable if we don’t get negative trade news. Trade news is the wild card. That’s the big if,’ said Sampson.
The Dow Jones Industrial Average rose 287.16 points, or 1.15 per cent, to 25,339.99, the S&P 500 gained 38.76 points, or 1.42 per cent, to 2,767.13 and the Nasdaq Composite added 167.83 points, or 2.29 per cent, to 7,496.89.
The technology sector’s biggest boosts were Apple and Microsoft, which rose more than 3.0 per cent. Visa and Mastercard climbed almost 5.0 per cent boosted by strong credit card sales included in bank earnings reports.
The S&P500’s financial sector ended the day up 0.1 per cent and the S&P 500 banks subsector closed down 0.4 per cent, well above its session low.
The biggest drag on the subsector was JPMorgan Chase & Co, which closed down 1.0 per cent despite reporting a quarterly profit that beat expectations.
PNC Financial led the losers among bank stocks, with a 5.6 per cent drop after the regional bank reported disappointing quarterly loan growth and said it expected only a small improvement in lending this quarter.
The three gainers among banks included Citigroup, which rose 2.0 per cent, and Wells Fargo, which eked out a 1.3 per cent gain after upbeat results.
Netflix and Amazon, some of the names that took a big hits in the week’s selloff, rose 5.7 per cent and and 4.0 per cent respectively.
The bank results launch a quarterly reporting season that will give the clearest picture yet of the impact on profits from President Donald Trump’s trade war with China.
Earnings at S&P 500 companies are estimated to have risen 21.5 per cent in the third quarter, according to I/B/E/S data from Refinitiv, a slowdown from the previous two quarters.
Energy stocks ended the day up 0.3 per cent as oil prices steadied to settle up slightly after a volatile session dropped on a weakening oil demand outlook.
The consumer discretionary and communication services sectors, both rose more than 2.0 per cent.
Advancing issues outnumbered declining ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favoured advancers.
The S&P 500 index posted no new 52-week highs and 52 new lows; the Nasdaq Composite recorded 10 new highs and 234 new lows.
Volume on US exchanges was 8.91 billion shares, well above the 7.78 billion average for the last 20 trading days but below the soaring volume of Thursday’s and Wednesday’s sessions.