US Stocks Close Mostly Lower Friday 02/26 15:57
A choppy day on Wall Street ended with stocks mostly lower Friday, helping
push the S&P 500 to its second straight weekly loss.
(AP) -- A choppy day on Wall Street ended with stocks mostly lower Friday,
helping push the S&P 500 to its second straight weekly loss.
Investors continued to watch the bond market, where Treasury yields eased
lower, as well as Washington, where Congress is expected to vote on President
Joe Biden's stimulus package.
Losses in banks and health care stocks helped drag the S&P 500 down 0.5%,
erasing an early gain. Falling oil prices weighed on energy stocks. Technology
and communication services companies, which bore the brunt of the selling a day
before, recovered slightly, which helped the tech-heavy Nasdaq composite manage
a 0.6% gain.
Bond yields eased off of their multi-week climb. The yield on the 10-year
U.S. Treasury fell to 1.42% from 1.51%. late Thursday.
"We still think the uptrend in (stocks) is very much intact and that they'll
outperform bonds in the coming year," said Sameer Samana, senior global market
strategist at Wells Fargo Investment Institute.
The S&P 500 index fell 18.19 points to 3,811.15. Despite a two-week slide,
the index managed a 2.6% gain for February after a 1.1% loss in January.
The Dow Jones Industrial Average dropped 469.64 points, or 1.5%, to
30,932.37. The Nasdaq gained 72.91 points to 13,192.34. The index still posted
its biggest weekly loss since October. The Russell 2000 index of smaller
companies eked out a small gain, adding 0.88 points, or less than 0.1%, to
The indexes remain close to the all-time highs they set earlier this month.
A sell-off on Wall Street Thursday picked up speed when the yield on the
10-year U.S. Treasury note rose above 1.5%, a level not seen in more than a
year and far above the 0.92% it was trading at only two months ago. That move
raised the alarm that yields, and the interest rates they influence, will move
higher from here.
The recent rise in bond yields reflects growing confidence that the economy
is on the path to recovery, but also expectations that inflation is headed
higher, which might prompt central banks eventually to raise interest rates to
cool price increases. Rising yields can make stocks look less attractive
relative to bonds, which is why every tick up in yields has corresponded with a
tick down in stock prices.
"Investors should look at this as an affirmation that the recovery is taking
hold," Brian Levitt, Global Market Strategist at Invesco.
Samana said he still expects interest rates will continue to rise, but at a
Technology stocks have been impacted more than the broader market by the
rise in bond yields. Tech stocks tend to trade at higher valuations than the
overall market. Investors are also betting that with vaccinations, the
coronavirus pandemic may be coming to an end which would pivot consumer
behavior away from online-only shopping.
In Washington, Democrats in Congress are preparing to move forward with
President Biden's $1.9 trillion stimulus package, with a vote in the House of
Representatives planned for Friday. The Senate could vote on the package as
early as next week.
The stimulus bill would include yet another round of one-time payments to
most Americans, including an expansion of other refundable tax credits like the
child tax credit, as well as additional aid to state and local governments to
combat the pandemic.