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NEW YORK – Shares rebounded on Friday, catching some of the week's heavy losses, but the stock market turmoil of the past few days leaves no doubt that the relative calm of the markets throughout the summer has been shattered.
Major US indices closed the week down about 4%, their worst weekly loss in six months. An index measuring the performance of small-company stocks had its worst week since the beginning of 2016.
Leading technology and consumer-driven businesses led the recovery on Friday. Long-time favorites of many investors, they have been diving in recent days.
Market observers have cited rising interest rates, which could slow down the economy and make bonds more attractive to investors than equities.
Apple climbed 3.6 percent to $ 222.11 and Microsoft's 3.5 percent to $ 109.57. Amazon jumped 4% to $ 1,788.41. They are the three most profitable companies in the United States and have dropped dramatically in recent days: Wednesday, each suffered its biggest loss in more than two years. This led to a spectacular end to three months of calm in the US market.
The S & P 500 index rose 38.76 points, or 1.4%, to 2,767.13, ending a series of six losses. The benchmark fell 4.1% this week, and 5.6% since its last record, set 20 September. Thanks to the significant gain of technology companies, the Nasdaq composite jumped by 167.83 points, or 2.3%, to 7,496.89. .
The Dow Jones Industrial Average jumped 414 points early, then gave up and fell slightly. He rebounded and finished with a gain of 287.16 points, or 1.1%, to 25,339.99.
The recent slump in the market began last week, when solid economic data and positive comments from Federal Reserve Chairman Jerome Powell helped trigger a sell-off in the bond market, with investors betting that the US economy will continue at a steady pace. This has lowered bond prices and pushed yields up to seven-year highs.
This resulted in a sharp rise in interest rates, which worried equity investors, believing that a large increase could dampen economic growth. The big market fluctuations on Friday suggest that these fears have not disappeared. The VIX, a measure of volatility expected by investors, has not been as high in six months.
"What seems to have motivated this trend is the fear that interest rates will rise faster because the Fed was too aggressive or the economy was overheating," said David Kelly, global chief strategist for JPMorgan. Funds. Kelly said that he did not think that one or the other of these fears is justified because the Fed does not raise interest rates as quickly and growth economic has not accelerated recently.
Small businesses did not do as well. The Russell 2000 index rose only 1.30 points, or 0.1%, to 1,546.68, thus closing its biggest loss in a week since January 2016. High dividend stocks such as utilities and REITs also grew less than the rest of the market. They have held up relatively well in recent days. Investors view them as relatively safe and stable assets, which look better when growth is uncertain and the rest of the market is in turmoil.
US automakers Ford and General Motors continued to collapse. GM lost 1.6% to $ 31.79, its lowest level in nearly two years. Ford, the lowest in almost nine years, fell 1.9% to $ 8.64. Both plunged this year due to slower sales and Trump administration tariffs on steel and aluminum, which add to their manufacturing costs.
Inventories have fallen further in recent days following reports that Ford could cut jobs. In late September, Ford Chairman Jim Hackett said that tariffs on steel and aluminum would cost the company $ 1 billion by 2019.
Investors are also increasingly concerned that trade tensions between the US and China are holding back global economic growth. The International Monetary Fund cut its forecast for global economic growth this week due to trade tensions and rising interest rates.
Sam Stovall, chief investment strategist at CFRA, said stocks had fallen too far, but markets could be further disrupted. While equities had made good progress despite rising trade tensions between China and the United States, investors now seem more worried.
"Everyone has pretty much rejected the effects of the trade war on US stocks and is now starting to think 'wait a minute, maybe there might be a problem,'" he said. "I do not think the reasons for the decline have been resolved."
Bond prices fell slightly. The yield on the 10-year Treasury note reached 3.15%, 3.13%. At the beginning of the year, it rose to 2.46%.
US crude added 0.5% to $ 71.34 a barrel in New York. Brent Brut, the international standard, rose 0.2% to 80.43 dollars a barrel in London.
Wholesale gasoline rose 0.5% to $ 1.94 a gallon. Fuel oil fell 0.5% to $ 2.32 per gallon. Natural gas lost 1.9% to $ 3.16 per 1,000 cubic feet.
Asian equities also rebounded. The Nikkei 225 of Japan rose 0.5% after falling early in the day and a loss of nearly 4% Thursday. Hong Kong Hang Seng jumped 2.1% and Kospi in South Korea 1.5%.
European equities ended mainly down. The French CAC 40 plunged 0.2%, as did the FTSE 100 in Britain. The DAX in Germany slipped 0.1%.
After a big jump on Thursday, gold lost 0.5% to $ 1,222 an ounce. Silver rose 0.2% to 14.64 dollars an ounce. Copper slipped 0.1% to $ 2.80 a pound.
The dollar rose from 111.94 yen to 112.01 yen. The euro rose from 1.1594 dollar to 1.1563 dollar.
Associate Press Editor Annabelle Liang contributed from Singapore.
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