U.S. stocks finish tumultuous week on a high note
U.S. equities ended their worst week in two years on a positive note, but the rate-hike fears that rocked markets in recent days may return when inflation figures come out Feb. 14.
The S&P 500 Index erased a loss of 1.9 percent Friday to close 1.5 percent higher on the day. Still, this month’s selloff has wiped out the benchmark’s gains for the year, and rising Treasury yields could spark more convulsions.
“Sometimes making a bottom can take time,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co., said by phone. “Investors should be at least aware, cognizant, and expect a little more volatility after we go through this period of more cathartic volatility.”
After pushing above 40, the Cboe Volatility Index fell below 30 but remains more than twice last week’s levels.
Commodities including oil, gold and industrial metals moved lower Friday. The dollar, euro and sterling all declined.
Europe and Asia weren’t spared from the drama that’s afflicted global stocks. The Stoxx Europe 600 Index clocked its worst week since 2016, losing almost half a year’s gains. China’s benchmark fell the most in almost two years earlier, while the MSCI World Index is set for its biggest weekly drop since 2016. A measure of U.S. bond-market volatility soared, as core European bond yields dropped.
Traders are now focusing on next week’s U.S. consumer-price data after a week in which the 10-year yield pushed as high as 2.88 per cent. Equity investors took the signal to mean interest rates will rise as inflation gathers pace, denting earnings and consumers’ spending power.
These are the main moves in markets:
The S&P 500 Index rose 1.5 per cent as of 4 p.m. in New York. The Dow Jones Industrial Average climbed 1.4 per cent and the Nasdaq 100 added 1.7 per cent. The Stoxx Europe 600 Index declined 1.4 per cent, the lowest in more than five months. The U.K.’s FTSE 100 Index decreased 1.1 per cent to a 13-month low. The MSCI Emerging Market Index fell 1.6 per cent, the seventh straight decline.
The Bloomberg Dollar Spot Index fell 0.1 per cent. The euro declined 0.1 per cent to $1.2236. The British pound sank 0.7 per cent to US$1.3819, the weakest in more than three weeks. The Japanese yen fell less than 0.05 per cent to 108.77 per dollar.
The yield on 10-year Treasuries rose two basis points to 2.85 per cent. Germany’s 10-year yield dipped two basis points to 0.75 per cent. Britain’s 10-year yield declined five basis points to 1.57 per cent.
West Texas Intermediate crude dipped 3.2 per cent to US$59.18 a barrel, the lowest in six weeks. Gold fell 0.3 per cent to US$1,314.59 an ounce. Copper decreased 1.3 per cent to US$6,755 a metric ton. The Bloomberg Commodity Index fell 1.6 per cent, its sixth straight decline.