NEW YORK – Optimism returned to Wall Street on Friday, and stocks rallied to cap a shaky week dogged by worries that rising novel coronavirus counts may halt the economy's recent upswing.
The S&P 500 climbed 1%, and the biggest gains came from cruise ship operators, airlines, banks and other companies that most need the economy to continue to reopen and strengthen.
The Dow Jones Industrial Average rose 369.21 points, or 1.4%, to 26,075.30. The Nasdaq composite added 69.69, or 0.7%, to 10,617.44, a new high. The S&P 500 rose 32.99, to 3,185.04.
After starting Friday with modest drops, stocks and Treasury yields erased their declines to drive higher. In a signal of rising expectations for the economy, the Russell 2000 index of smaller stocks rose more than the rest of the market, up 1.7%.
They're the latest eddies in what was an erratic week for markets. Prices swung, sometimes sharply within a single day, with worries about rising hospitalizations and COVID-19 trends in Florida and other hotpots around the world. The S&P 500 flip-flopped between a gain and loss through each day of the week.
Analysts said an encouraging report from Gilead Sciences about its investigational treatment of COVID-19, remdesivir, helped drive Friday's rebound.
“So, for the first time in a lot of days we're seeing smaller caps outperform,” said Bob Shea, CEO of TrimTabs Asset Management.
The week's meandering action was a microcosm of the up-and-down churn that stocks have been stuck in for a little more than a month. The market's momentum has stalled since early June, after the S&P 500 roared back to recover most of an earlier 34% plummet. Massive amounts of aid from central banks and governments around the world ignited the rally.
“We are dealing with an unprecedented time economically,” said Katerina Simonetti, senior portfolio manager at UBS Private Wealth Management.
“We have to remember that the government support and economic stimulus has been historically unprecedented. That's a huge deal, and it's going to make a difference for this market.”
It also helped send the S&P 500 to a 1.8% rise for the week, its second straight weekly gain.