US Stocks End 3-Week Losing Streak 01/28 15:55
Wall Street ended a volatile week of trading Friday with a late-afternoon
buying spree that gave the major stock indexes their biggest gains of the year
and snapped their three-week losing streak.
(AP) -- Wall Street ended a volatile week of trading Friday with a
late-afternoon buying spree that gave the major stock indexes their biggest
gains of the year and snapped their three-week losing streak.
The S&P 500 rose 2.4%, with nearly all of it coming in the last hour of
trading. The Dow Jones Industrial Average added 1.7% and the Nasdaq jumped 3.1%.
The strong finish marked a reversal for the indexes, which had all been in
the red earlier in the day. The Nasdaq managed the biggest about-face,
recovering from a 0.9% deficit. Friday was only the latest in a string of
sudden moves up and down this week.
Markets have been jittery as investors try to gauge how aggressively the
Federal Reserve will move to ease its historic support for markets and the
economy. There is likely going to be more volatility ahead as investors closely
watch the impact of interest rate increases on the broader economy and the
"I don't think we're out of the woods yet in terms of this kind of frenzied
market behavior," said Liz Ann Sonders, chief investment strategist at Charles
The S&P 500 rose 105.34 points to 4,431.85. The Dow gained 564.69 points to
34,725.47. The Nasdaq rose 417.79 points to 13,770.57.
The latest gains come late in a week where investors had been monitoring the
index for what market watchers call a "correction," which is when an index
sheds more than 10% of its value from a record high. The index is now 7.6%
below the latest record reached on Jan. 3.
Bond yields edged lower. The yield on the 10-year Treasury fell to 1.78%
from 1.81% late Thursday.
Investors expect the Fed to start raising interest rates in March and now
expect five or more hikes of a quarter point each as the most likely path for
the central bank this year. The sentiment follows the latest Fed statement and
comments from Chair Jerome Powell that inflation is "slightly worse" than it
was in December. The Fed also plans to phase out its bond purchases in March
and is likely to start reducing the size of its balance sheet at some point, a
move that has a similar effect as an increase in rates.
Investors expect the first rate hikes to come in March.
Powell has acknowledged that the high inflation that is squeezing businesses
and consumers isn't loosening its grip and that could force the Fed to act more
aggressively about raising interest rates.
The latest round of corporate earnings has shown that companies are still
feeling the pinch of supply chain problems, raw material costs and other
pressures from inflation.
Oreo cookie maker Mondelez fell 2.6% after issuing its latest warning about
inflation hurting operations in North America. KLA, which makes equipment for
chipmakers, fell 0.8% and computer hard drive maker Western Digital fell 9.1%
after giving similarly disappointing updates on pressure from inflation.
Additional government reports are also showing that consumers are facing
higher prices and they might be discouraging spending. A measure of prices that
is closely tracked by the Fed rose 5.8% last year, the sharpest increase since
1982. The report from the Commerce Department also said that consumer spending
fell 0.6% in December, with purchases of cars, electronics, and clothes
Inflation concerns and worries about the impact of rising interest rates
converged this week with worries about a potential conflict between Ukraine and
Russia that could raise energy prices. A conflict could also distract nations
from focusing on the lingering virus pandemic, which continues to threaten
economic growth with each wave spiking COVID-19 cases.