The major averages rebounded to end a week of consistent losses as investors looked to prevent the S&P 500 away from hitting bear market territory. The Dow Jones Industrial Average rose 466 points, or 1.47%, after being up as much as 545 points, snapping a six-day losing streak. The S&P 500 rose 93 points or 2.3% while the Nasdaq Composite 434 points or 3.8%.
The S&P 500 finished its best day since May 4 while the Nasdaq posted its most positive day since November 2020.
Despite Friday's gains, the major averages posted losses for the week, with the Dow closing down more than 2% and posting its first 7-week losing streak since 2001. The S&P 500 fell 2.4% and hit its longest weekly losing streak since 2011, while the Nasdaq has slipped about 3% this week.
All the S&P 500 sectors closed higher Friday led by gains in consumer discretionary and information technology, which added 4.1% and 3.4%, respectively. It was a broad-based comeback with about 95% of the S&P 500 ending the session in the green.
American Express, Nike and Salesforce rose more than 3% each, leading the Dow higher.
Beaten-up tech stocks also made a comeback/ Meta Platforms and Alphabet added 3%, while Tesla jumped 5.4%. Semiconductors Nvidia and AMD also popped 9% as Apple rose 3% after becoming the last Big Tech name to fall into its own bear market on Thursday.
Following strong gains on Thursday, heavily shorted meme stocks AMC Entertainment and GameStop jumped 5% and 7.7%, respectively.
Meanwhile, Twitter shares plunged 10.9% after Elon Musk announced a standstill in the takeover deal as he awaits more details on the platform's fake accounts. In other news, Robinhood popped 24.8% after crypto CEO Sam Bankman-Fried acquired a stake in the company.
The stock market has been slumping for months, starting with high-growth unprofitable tech stocks late last year and spreading to even companies with healthy cash flows stocks in recent weeks. The decline has wiped much of the rapid gains stocks enjoyed off their pandemic lows in March 2020.
So far, the S&P 500 and Dow have avoided bear territory but Friday's rally does not mean the markets are out of the woods just yet, said Ryan Detrick of LPL Financial.
One reason that stocks have struggled in recent months is high inflation, and the Federal Reserve's attempts to contain prices by raising rates. Fed Chair Jerome Powell told NPR on Thursday that he couldn't guarantee a "soft landing" that brought down inflation without causing a recession.
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