Stock market rises as S&P 500 and Nasdaq rise

All three major indices headed into Friday’s session with solid gains for the week, a sharp reversal of a string of weekly losses that has seen the S&P 500 teetering on the edge of bear market territory. Last week, the Dow It has fallen for the eighth consecutive week, its longest stretch since 1932, while the S&P 500 and Nasdaq Composite posted seven weeks of losses. However, this week all three indices are up 3.4% or more, based on Thursday’s close. The Dow led the gains this week, up 4.4%, on track for its first gain since March.

This week’s gains provided a respite from what felt like an ongoing blow to the governor. Many investors and analysts have cited this week’s earnings as reason for optimism, with companies like Macy’s and Dollar Tree Reporting strong increases in sales. Deep selling in some stocks made valuations more attractive, encouraging some investors to do so Go into and buy a dive.

“People don’t want to give up on a tactic or strategy, and it has worked really well for them,” said Steve Sosnick, chief strategist at Interactive Brokers. “We’ve seen our customers buy with determination.”

Some investors said some stocks and sectors are becoming more attractive as valuations drop. Nearly $21 billion flowed into global equity funds in the week through Wednesday, according to a BofA Global Research analysis of EPFR data, the largest inflow in 10 weeks.

On Friday, investors found good news in a fresh round of data. New data showed that US households boosted spending for the fourth consecutive month, even though they plunged deeply into their savings to do so. The savings rate has fallen to its lowest level in 14 years. Meanwhile, the US inflation reading eased in April.

There has been variance in Americans’ behavior and how they say they feel about the economy, highlighting the uncertainty regarding the economy at the moment. The University of Michigan Consumer Confidence Index fell to its lowest level since August 2011. Rising inflation has dented Americans’ wallets and heightened fears about a recession, leading to lower levels of confidence.

Year-round turmoil and a strong rush in recent days have left some investors wondering: Is the worst over?

“I can’t count the times people have asked me: Have you seen surrender?” Sosnik said.

However, few investors and strategists are still willing to enter the bottom of the sell-off that has sent the S&P 500 down 15% for the year. Some traders said the recent gains looked like a short-term rally during a broader decline.

Only a few of the fundamental factors that drove stocks lower this year have changed. The Federal Reserve is on track to continue raising interest rates aggressively this year to combat rising inflation, raising fears that the measures will eventually push the US economy into recession. Meanwhile, Covid-19 has been closed in China and war in ukraine Exacerbated supply chain crises. For several weeks, investors were also digesting disappointing earnings results and data that added to the bleaker picture for the economy.

“We still think we are seeing nothing but a short-term rally,” said Florian Ilbo, head of macro at Lombard Odier Investment Managers, noting that the company’s major multi-asset portfolio holds about 60% of the liquidity.

He said the recent bearish situation among professional and retail investors indicates that the current bounce may extend further, as sentiment is often taken as a conflicting indicator.

A May survey by BofA Global Research showed that cash levels among global fund managers rose to their highest since 9/11. The September 11, 2001 attacks in the United States

Seema Shah, chief strategist at Principal Global Investors, said her company had discovered buying opportunities in stocks of small-cap, consumer goods and lucrative technology companies that continued to see an increase in value and use.

“It is very important at this point that investors come back to the market and look at the strength of the company before they pull back,” said Ms. Shah said. “As we approach the downturn, we expect some companies – those that are highly leveraged and don’t have such strong balance sheets or stable earnings expectations – to come under significant pressure.”

Shares of Dell Technologies Inc jumped 15% after reporting a rise in earnings and a dip in some operating expenses.

Ulta Beauty

It rose 10.2% after the retailer raised its full-year sales and earnings guidance after better-than-expected first-quarter results.

Gap shares fell 13% after the retailer turned a loss amid a decrease in net sales. Shares of cloud human resources software company Workday fell 7.2% after it reported revised first-quarter earnings that missed expectations.

In the bond market on Friday, the yield on the 10-year US Treasury fell to 2.738% from 2.756% on Thursday. Yields and prices move in opposite directions.

Oil prices fell, with Brent crude, the international benchmark, down 0.2% to $113.94 a barrel.

The dollar has lost steam again. The WSJ Dollar Index, which measures the greenback against a basket of 16 currencies, fell 0.1%, extending the range of recent losses amid concerns that the dollar is getting expensive relative to its fundamentals. The Russian ruble fell 1.1% against the dollar as well Extending its lows to another day After the country’s central bank cut interest rates.

Offshore, the Stoxx Europe 600 Continental Index added 1%. In Asia, Hong Kong’s Hang Seng rose 2.9%, led by shares

Ali BabaAnd

That jumped 12% after posting the earnings of it Beat analyst expectations. Japan’s Nikkei 225 index gained 0.7%. The Shanghai Composite Index is up 0.2%.

Write to Caitlin McCabe at [email protected] and Gunjan Banerji at [email protected]