US stocks rose sharply on Friday to partly offset losses from Thursday’s selloff in a choppy trading session with investors keeping a keen eye on economic reports, monthly car sales and higher yields.
Thursday’s selloff was triggered by losses in stocks that had previously recorded gains including biotechnology, technology and small capitalization gains.
Biotechnology and technology stocks completed rebounds on Friday to pace the S&P 500 and Nasdaq Composite to gains on the day though they remained on course for weekly losses.
The S&P 500 Index was up 15 points or 0.7% to 2100 points with seven of its ten key sectors, led by health and technology, trading higher on the day. Thus was a partial rebound from Thursday’s selloff where the benchmark index fell 1.1%.
The Benchmark Index, however, remains on course for a 0.9% loss this week after the Federal Reserve in its statement on Wednesday left the possibility open for a June interest rate hike.
The Nasdaq Composite advanced by 46 points or nearly 1.1% to 4,997.51 fuelled by a 2.5% gain in the Nasdaq Biotechnology Index to halt a 5 day losing streak.
The Dow Jones Industrial Average added tripled digits advancing by 142 points or 0.8% to 17,984 points
“This week felt like an unwinding of a lot of big trading positions that had been on for months and that had been extremely successful,” David Heidel, a regional investment director for the private client reserve of U.S. Bank, which oversees about $128 billion of assets, told Bloomberg.
“This is a rebound from the tough days we had earlier this week. People are taking a look at potential bargains.”
Government data on Friday showed that consumer sentiment jumped and car sales jumped in April while manufacturing remained flat at a two year low.
Market Analysts warned investors against reading too much into Friday’s market strength saying that it was most likely due to stocks being oversold during the week.
“When the GDP number came in and the Federal Reserve issued a statement after its meeting, it was not clear if investors were worried that the rates are going up or because the economy is slowing down,” John Manley, chief equity strategist at Wells Fargo Advantage Funds, told Market Watch.
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