Stocks rose on Friday to wrap up another strong week on a high note as the Dow Jones Industrial Average erased its losses of 2020. The 30-stock Dow closed 161 points higher, or 0.6%. The S&P 500 gained 0.7%. The Nasdaq Composite advanced 0.6%.
Friday's gains put the Dow in positive territory for the year. The Dow had not sported a year-to-date gain since late February, when it traded around an all-time high. After Friday's close, the Dow was up 0.4% for 2020. Walmart and Coca-Cola led the way for the Dow, rising 2.7% and 3.3%, respectively.
Friday's gains also put the S&P 500 on track for its biggest August gain since 1984. The broader market index is up 7.2% month to date. Tech and energy were the best-performing sectors in the S&P 500, gaining 1.1% and 1.9%, respectively.
For the week, the Dow rose 2.6% for its third weekly gain in four weeks. The S&P 500 and Nasdaq both notched five-week winning streaks, rising over 3% each. Friday's gains also put the S&P 500 on track for its biggest August gain since 1984. The broader market index is up 7.2% month to date.
Wall Street was coming off a mixed performance after the Federal Reserve on Thursday unveiled a major policy shift, allowing inflation and employment to run higher to continue to support the economy.
The move indicates that interest rates are likely to stay near zero for a long period of time. The central bank previously hiked rates preemptively to head off higher levels of inflation.
On the economic data front, personal income increased 0.4% month over month as personal spending rose 1.9% month over month. The final University of Michigan Index of Consumer Sentiment for August ticked up to 74.1 from the preliminary reading of 72.8.
The data provided some fuel for the reopening stocks like casinos, airlines, cruise lines, and hotels. Shares of MGM Resorts rose 4.6% even as the company announced plans to lay off 18,000 furloughed employees as a result of the pandemic.
U.S. Treasuries finished mixed. The 2-yr yield was flat at 0.15%, and the 10-yr yield declined two basis points to 0.73%. The U.S. Dollar Index fell 0.7% to 92.32. WTI crude futures declined 0.1% to $42.97/bbl. The CBOE Volatility Index declined 6.2% to 22.96 after touching 26.30 at its intraday high.
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