Stocks Notch Big Weekly Gains
23 May 2020 - 7:19AM
Dow Jones News
By Anna Hirtenstein, Gunjan Banerji and Chong Koh Ping
The S&P 500 rose Friday and notched a big weekly gain as
states around the country eased coronavirus restrictions, boosting
hopes about an economic recovery.
Major indexes declined early in the day before reversing course
or paring losses. The S&P 500 added 6.94 points, or 0.2%, to
2955.45. The Nasdaq Composite gained 39.71 points, or 0.4%, to
9324.59. The Dow Jones Industrial Average edged down 8.96 points,
or less than 0.1% to 24465.16.
Despite the relatively muted moves, all three major indexes
gained at least 3% this week, in part driven by optimism that
coronavirus vaccines will be available later this year.
Additionally, all 50 states have relaxed some of their coronavirus
restrictions, stirring hopes about an economic rebound as
municipalities start to reopen.
The S&P 500 and Dow added 3.2% and 3.3%, respectively, for
the week, while the Nasdaq climbed 3.4%.
The moves this week mark a continuation of an impressive stock
rebound since major indexes' lows in March, as investors have
looked ahead to a potential bounceback in the domestic economy
despite abysmal data that has shown the extent of the current
downturn.
Markets are closed Monday for Memorial Day in the U.S.
"We've been aggressive buyers" of stocks, said Dev Kantesaria,
founder of Valley Forge Capital Management, which oversees about
$750 million in assets. "I believe a year from now we will be
back..almost at old levels for the economy."
Mr. Kantesaria added that he's expecting weakness in parts of
the economy, but remains broadly optimistic about a recovery.
Still, some of the confidence that drove major indexes higher
earlier in the week abated Thursday as investors parsed new data
showing that about 2.4 million Americans filed for unemployment
benefits in the week ending May 16, continuing a sharp
deterioration in the labor market. On Friday, some of the simmering
tensions between the U.S. and China escalated, weighing on global
stocks.
The Hang Seng Index closed down 5.6% in its worst day since July
2015 after China moved to impose new national-security laws on the
city.
China scrapped its economic growth target for 2020 in a stark
acknowledgment of the challenges facing the world's second-largest
economy, sending crude oil and metal prices sharply lower.
"Anything that knocks China's growth rate, whether it's a slower
recovery from the coronavirus or a rise in tensions with the U.S.,
will weigh on global growth expectations," said Seema Shah, chief
strategist at Principal Global Investors.
Beijing's decision to omit a formal target comes amid the
sharpest contraction in four decades precipitated by a sudden halt
in manufacturing activity because of the coronavirus pandemic. The
nation's policy makers are signaling that they won't rush to
introduce additional stimulus measures, which suggests more
economic pain for countries that have become increasingly reliant
on China as an engine of growth.
China's proposed national security law would challenge the
financial hub's autonomy and threatens to increase tensions with
the U.S. Congress condemned the move, with senators promising an
urgent push on legislation that would impose sanctions on Chinese
officials and institutions involved in undermining Hong Kong's
Western-style rule of law.
The yield on the 10-year U.S. Treasury note rose to 0.659% on
Friday from 0.640% last week as bond prices rose.
Brent crude, the global oil benchmark, fell 2.6% on Friday to
$35.13 a barrel. Copper, a closely watched metal for its use in
industrial activity, slipped 1.8%.
"China is today the biggest importer of crude oil, so Chinese
growth is hugely important for oil demand," said Bjarne Schieldrop,
chief commodities analyst at Nordic bank SEB. "But at the same
time, demand is ticking up and supply is ticking down," as Asian
countries reopen, he said.
In Asia, most major stock benchmarks ended the day lower.
China's Shanghai Composite Index fell 1.9% while South Korea's
Kospi Index retreated 1.4%.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com, Gunjan
Banerji at Gunjan.Banerji@wsj.com and Chong Koh Ping at
chong.kohping@wsj.com
(END) Dow Jones Newswires
May 22, 2020 17:04 ET (21:04 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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