A Trader on the floor of the NYSE, March 11, 2022.
Source: NYSE
The S&P 500 continued climbing Friday after a three-day rally for the equity benchmark that put it on pace for its biggest weekly gain in more than a year.
The Dow Jones Industrial Average rose 274 points, or 0.8%. The S&P 500 gained 1.1%, and the Nasdaq Composite rose about 2%.
Stocks are coming off a massive three-day surge that’s set the S&P 500 up for its best week since November 2020. The broad market index is up more than 5% for the week, while the tech-heavy Nasdaq Composite has advanced more than 7% this week and is headed for its best week since February 2021.
Meanwhile, the blue-chip Dow is going for its fifth up day in a row. It’s risen 5% for the week and is also on track for its biggest weekly gain since November 2020.
Investors also continued to digest news from the Federal Reserve earlier this week, as well as a rise in Covid cases in Europe stemming from an emerging subvariant and the ongoing war between Russia and Ukraine.
“The worst thing about any crisis is when it first hits out of left field, it creates nothing but uncertainty. You have no idea what it means or where it’s going to go, and you react violently as an investor to get out of the way,” Jim Paulsen, chief investment strategist for the Leuthold Group, told CNBC’s “Closing Bell.” “But after you’ve had some time to vet it [you see] the market is suggesting that they’re starting to feel a little better, that there’s some direction of this thing… It does seem like the economic fallout will not be nearly as detrimental as it looked going in.”
President Joe Biden spoke with Chinese President Xi Jinping on Friday to discuss Russia’s invasion of Ukraine and Xi told Biden that the United States and China each had an obligation to promote peace. Russia has made requests for military or economic aid from China and the call was seen as a critical test of whether Biden can convince China to stay on the sidelines of the conflict.
Several missiles hit an aircraft repair center on the outskirts Lviv in western Ukraine. Meanwhile, President Joe Biden is slated to speak with Chinese President Xi Jinping to discuss the conflict. A Ukrainian official also said one person was killed in an airstrike that hit Kyiv. (Click here for live updates.)
Russia on Thursday reportedly made a $117 million bond payment in dollars, thereby avoiding what would be a historic foreign currency debt default. Stocks extended their gains following the report. Bloomberg reported Friday that clearing houses in Europe and the U.S. have processed the payment.
Investors were also assessing their own risk appetite. Despite the week’s big gains, they didn’t come without their share of volatility, which has showed no signs of tempering anytime soon.
“For 2022, volatility is going to be the investor narrative,” Greg Bassuk, CEO of AXS Investments, told CNBC. “We would normally feel much more bullish around any single factor having a good ability to level the volatility, but given this unprecedented level of very significant factors that could drive the markets one way or another, we don’t see volatility normalizing over the next couple of months.”
On Friday tech stocks led the market higher. Salesforce and Apple were among the top gainers in the Dow, rising 2% and 1%, respectively. Nvidia climbed more than 5%, Twitter gained 3.9% and Paycom and Fortinet each advanced 3%.
Shares of Moderna rose 4.4% as the company seeks FDA approval for a second Covid-19 booster shot for adults 18 years or older.
Boeing gained more than 1% after Reuters reported the company is in talks with Delta for a landmark deal.
Traders are also still digesting the latest Federal Reserve update from earlier this week. The central bank signaled it expects to raise rates at its remaining six meetings this year. The Fed also raised rates for the first time since 2018 on Wednesday.
On Friday, Fed Governor Christopher Waller told CNBC’s “Squawk Box” the central bank may need to enact at least one more interest rate hike this year of at 50 basis points or more in order to tame “raging” inflation.
“Fortunately, investor expectations for inflation over the next five years was brought down quite a bit, which, if sustained, will continue [to] be helpful for the Fed and the markets despite somewhat higher interest rates,” said John Vail, chief global strategist at Nikko Asset Management.
