Friday’s Stock Market Close: US Equities Finish Higher In Volatile Trading Session, Yields Jump

U.S. stocks climbed on Friday although trading was extremely erratic, with wild swings as investors sought to recover from Thursday’s huge selloff.

The Dow Jones Industrial Average gained 477.37 points to 25,605.54, while the S&P 500 rose 39.21 points to 3,041.31 and the Nasdaq Composite Index advanced 96.08 points to 9,588.81.

For the week, the Dow plunged 5.55%.

Friday’s volume on the New York Stock Exchange totaled 5.28 billion shares with 2,335 issues advancing, 12 setting new highs, and 652 declining, with two stocks setting new lows .

Active movers were led by Hertz Global Holdings Inc. (HTZ), American Airlines Group Inc. (AAL) and Norwegian Cruise Line Holdings Ltd. (NCLH)

Arizona, South Carolina and Texas have reported a spike in coronavirus cases. The U.S. has confirmed more than 2 million coronavirus cases along with at least 100,000 deaths.

The University of Michigan's consumer-sentiment index jumped 9.1% to 78.9 in June – the second straight month of improvement.

The U.K. economy shrank by a record 20.4% in April.

“Given the magnitude of the rally, it would shock me if we had a one day sell-off and that’s it,” said Andrew Slimmon, managing director and senior portfolio manager at Morgan Stanley Investment Management, prior ro Friday's trading. “The stocks that are up the most from the lows are still the risk-on, high-beta, value, small-cap stocks. They’re still the big winners and I would suspect that there’s more pain to come near-term before the market clears out kind of this excessive speculation that we’ve seen recently.”

“We had gone straight up more than 30% without a real sell-off, so you’re due for one, and I don’t think it’s the worst thing in the world,” said J.J. Kinahan, chief market strategist at TD Ameritrade. “As more states get back, the question becomes: Are they going to ramp up fast enough to please Wall Street? What you’re seeing is it’ll be hard to do that. Some of these stocks may have gotten ahead of [themselves]. When you see some of the airlines being priced at the levels they were before this all started when they say they’re going to do 60% of their business just doesn’t make sense.”

“Once the S&P 500 crossed above the 200-day moving average [last month], it gave investors the green light to buy stocks; it said things are OK with the economy,” said Mitchell Goldberg, CEO of ClientFirst Strategy. “It also signaled hedge fund managers who got too heavy into cash are now way behind their benchmarks and are now performance-chasing.”

Julie Fox, managing director, northeast private wealth market head at UBS Financial Services in New York, said the biggest risk to the stock market is a meaningful recurrence of the coronavirus.

“We need to see a faster than expected large scale production of a vaccine. This would limit major economies re-imposing lockdowns,” she said. “We will continue to see volatility across the markets, as there is plenty of uncertainty on what the reopening of the U.S. economy looks like. The Federal Reserve is aware of these uncertainties and has repeated its pledge of taking the steps necessary to help the economy recover.”

Overnight in Asia, markets finished lower. The Shanghai Composite slipped 0.04%; Hong Kong’s Hang Seng retreated 0.73%; while Japan’s Nikkei-225 fell 0.75%.

In Europe markets closed mixed, as Britain’s FTSE-100 gained 0.47%, while France’s CAC-40 climbed 0.49% and Germany’s DAX slipped 0.18%.

Crude oil futures edged up 0.3% at $36.45 per barrel, Brent crude climbed 0.41% at $38.89. Gold futures slipped 0.11%.

The euro edged down 0.35% at $1.1259 while the pound sterling dropped 0.61% at $1.2525.

The yield on the 10-year Treasury jumped 7.04% to 0.699% while yield on the 30-year Treasury rose 3.5% to 1.45%.