By Alex Veiga
NEW YORK: As comebacks go, this one was a couple of days in the making.
On Friday, the U.S. stock market rebounded from a deep slump earlier in the week to muster the first positive five-day stretch after three weeks of declines.
The day’s modest gains added to a strong finish for stocks a day earlier, enough for the Dow Jones industrial average to eke out a 0.6 percent gain for the week, while the S&P 500 index finished up 0.8 percent. Both are still down for the year.
The Dow Jones industrial average rose 165.55 points, or 1.1 percent, to 15,794.08. The Standard & Poor’s 500 rose 23.59 points, or 1.3 percent, to 1,797.02. The Nasdaq composite increased 68.74 points, or 1.7 percent, to 4,125.86.
Expedia led the gains in the S&P 500 index, surging 14 percent after reporting that its profit and revenue jumped as hotel bookings increased.
The market dug itself a hole at the start of the week, plunging more than 2 percent on Monday. The slide began with investor anxiety over an industry survey that found that manufacturing grew much more slowly in January than in December. Lackluster U.S. auto sales for January added to the bad news.
The outlook began to brighten at midweek, with a survey of private businesses that showed companies added 175,000 jobs in January, roughly in line with average monthly gains the past two years.
On Thursday, news that fewer people applied for unemployment benefits last week helped lift the market.
The Dow is still down 4.7 percent for the year, while the S&P 500 is down 2.8 percent.
Did the government’s latest survey of the job market give investors reason to feel better about the economy? Opinions were mixed on Wall Street.
“It appears we sort of found our sea legs here in the middle of the week and we’re starting to rally back into a more normal valuation pattern,” said Phil Orlando, chief equity strategist at Federated Investors.
Others saw the potential for more turbulence.
“This is sort of the new market we live in,” Kinahan said.
“There are going to be gyrations where we’re higher, we’re lower, some quick corrections, some quick rallies. This is going to set a tone for the first half of the year.”
Investors will have no shortage of potentially market-moving news to watch out for in the coming weeks.