(Bloomberg) – Buyers of Dip caused stocks to rebound after a previous period of selling that caused the Nasdaq 100 to fall 10% from a record high.
All the major groups in the S&P 500 rose, while the high-tech gauge climbed more than 1.5% as the giants Amazon.com Inc. and Apple Inc. wiped out their losses. Robinhood Markets Inc., the trading platform behind the surge in GameStop Corp. shares, has chosen the Nasdaq for its possible IPO, according to a press report. Earlier on Friday, stocks retreated as US employment data beat estimates, fueling concern the economy could get too hot and push up inflation. Benchmark 10-year yields stabilized after hitting 1.6%.
Friday’s rally in financial markets wiped out the S&P 500’s decline for the week. The intense volatility of the past few days has been a test for stock bulls who see the recent surge in Treasury yields as an indication of a better outlook for the economy and corporate earnings. As concerns about stock valuations have emerged, several analysts say that as the data continues to improve, any selloff could present lower buying opportunities.
“A lot of investors are going to buy these declines here, the capital continues to flow into stocks,” said Tony Bedikian, head of global markets at Citizens Bank. Bond yields are still “incredibly low, so stock yields are still very attractive to investors,” he added.
Yields on US Treasuries have risen due to a much stronger economic outlook and are not a cause for concern – or a call for political action – said Federal Reserve Bank of St. Louis President James Bullard . His remarks follow President Jerome Powell’s warning on Thursday that rising yields had caught his attention and he is “concerned about disorderly market conditions or continued tightening in financial conditions.”
“As a central banker, I am always concerned if there are any messy transactions or something that seems panicked,” Bullard said Friday in an interview with Wharton Business Radio. “It would get my attention. But I think we are not there yet.
Here are some of the main movements in the markets:
- The S&P 500 was up 1.9% at 4 p.m. New York time.
- The Stoxx Europe 600 index slipped 0.8%.
- The MSCI Asia Pacific index fell 0.6%.
- The MSCI Emerging Markets Index fell 0.6%.
- The Bloomberg Dollar Spot Index rose 0.4%.
- The euro plunged 0.4% to $ 1.1917.
- The Japanese yen depreciated 0.4% to 108.36 per dollar.
- The yield on 10-year Treasuries rose less than a basis point to 1.57%.
- Germany’s 10-year yield climbed one basis point to -0.30%.
- Britain’s 10-year yield rose three basis points to 0.756%.
- West Texas Intermediate crude climbed 3.9% to $ 66.29 a barrel.
- Gold rose 0.1% to $ 1,698.65 an ounce.
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