NEW YORK CITY, RAW – Wall Street has ended sharply higher after a volatile session, with the Nasdaq rebounding at the end of a week that saw it extend losses to about 10 per cent from its previous record high.
All three main indices bounced back from losses earlier in the day, with investors in recent sessions spooked by rising interest rates that offset optimism about an economic rebound.
Microsoft rallied 2.15 per cent on Friday, boosting the S&P 500 more than any other stock, with gains in Alphabet, Apple and Oracle also lifting the index.
The benchmark 10-year US Treasury yields hit a new one-year high of 1.626 per cent after non-farm payrolls increased by 379,000 jobs last month, blowing past a rise of 182,000 forecast by economists polled by Reuters.
Focus is also on a $US1.9 trillion coronavirus aid bill as a sharply divided US Senate began what was expected to be a long debate over a slew of amendments on how that money would be spent.
The Nasdaq logged its third straight weekly decline after a recent spike in Treasury yields dented demand for high-flying technology stocks.
Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term.
The tech-heavy Nasdaq is around eight per cent below its February 12 closing high.
Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, said his firm in recent days has bought shares in a handful of growth companies whose prices have been pummelled in the recent sell-off.
“Next week, I would expect volatility to continue, with pockets of opportunity, with certain things that sold off potentially rebounding,” Dollarhide said.
The Dow Jones Industrial Average rose 1.85 per cent to end at 31,496.3 points, while the S&P 500 gained 1.95 per cent to 3,841.94.
The Nasdaq Composite climbed 1.55 per cent to 12,920.15.
In a busy session, volume on US exchanges was 17.4 billion shares, compared with the 15.3 billion average for the full session over the last 20 trading days.
For the week, the S&P 500 rose 0.8 per cent, the Dow added 1.8 per cent and the Nasdaq lost 2.1 per cent.
In Friday’s session, the S&P 500 energy sector index surged 3.9 per cent to more than a one-year high as oil prices soared.
Oracle Corp jumped more than six per cent after Barclays upgraded the business software maker to “overweight” expecting improvement in the IT spending environment.
Advancing issues outnumbered declining ones on the NYSE by a 2.86-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favoured advancers.
The S&P 500 posted 55 new 52-week highs and no new lows; the Nasdaq Composite recorded 225 new highs and 134 new lows.