Stocks ended higher again on Wall Street Friday, giving the S&P 500 its best week since July. The benchmark index added 0.7% and ended the week up 1.8%.
Encouraging reports on the economy and corporate profits helped the market steady itself following a shaky few weeks. J.B. Hunt Transport Services, Goldman Sachs, Alcoa and other companies turned in solid earnings reports.
That dovetailed with a report showing people spent much more at U.S. retailers last month than Wall Street expected. Treasury yields also climbed following the encouraging data. Crude oil prices rose, while natural gas fell.
Friday's gain follows up on a 1.7% jump for the S&P 500 Thursday, its best day since March, which was driven by stronger-than-expected earnings reports and encouraging data on the job market. The S&P 500 is on track for a 1.9% gain for the week and its best weekly performance since July.
It's a turnaround from a shaky few weeks, when the S&P 500 fell as much as 5.2% from its record set on Sept. 2. Worries about stubbornly high inflation, reduced support for markets from the Federal Reserve and a slowing economy helped to knock stock prices around. The S&P 500 is back within 1.5% of its all-time high.
Earnings reporting season has just begun, but early indicators are encouraging. All but one of the 19 companies in the S&P 500 that reported quarterly results this week topped analysts' profit forecasts. Such strength is crucial after climbing interest rates heightened worries that stock prices had grown too expensive relative to profits.
The stronger-than-expected reports on the economy also help calm chatter about “stagflation," which is the feared marriage of a stagnating economy and high inflation.
Of course, all is not clear yet. A report on Friday showing consumer sentiment was weaker than expected amid inflation worries helped limit the market's gains.
Still, stocks of companies whose profits are most closely tied to the strength of the economy, including retailers, automakers and travel-related businesses, were leading the way higher Friday. Amazon rose 2.8%, Ford Motor added 2% and Expedia Group was 2.5% higher.
Other than financial companies, which benefited from the better-than-expected profit reports from several big-name banks, industrial businesses and energy producers were also among the strongest gainers.
Johnson & Johnson rose 0.6% after a Food and Drug Administration panel endorsed booster doses of the company's single-shot COVID-19 vaccine. The panel said Friday that the booster should be offered at least two months after immunization but didn’t suggest a firm time.
Treasury yields also rose following the much stronger-than-expected report on retail sales. The yield on the 10-year note climbed to 1.57% from 1.52% late Thursday.
Higher Treasury yields in recent weeks have been holding back technology and other high-growth stocks recently. When bonds are paying more in interest, investors aren't as willing to wait as long a time for big profit growth expectations to come to fruition or to pay as high prices for them.
Tech stocks in the S&P 500 rose a 0.8% Friday, less than the rest of the market, while the communication-services sector that includes many internet companies slipped 0.1%.
Stock markets overseas also notched gains. In Europe, Germany's DAX returned 0.8%, and France's CAC 40 gained 0.6%. The FTSE 100 in London rose 0.4%.
In Asia, Tokyo’s Nikkei 225 added 1.8%, Hong Kong's Hang Seng climbed 1.5% and Seoul's Kospi advanced 0.9%.
The price of benchmark U.S. oil rose 1.2% to $82.28 per barrel, continuing a powerful run that has sent it up more than 70% this year and fanned worries about high inflation. The global benchmark for crude climbed 1%, though the price of U.S. natural gas fell 4.9%.
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