US stocks snap 3-day losing streak in roller coaster week
Gains among technology companies helped snap a three-day losing streak for U.S. stocks Friday, though the market ended with its worst weekly loss since March.
The modest rebound came at the end of a turbulent week on Wall Street as escalating tensions between the U.S. and North Korea rattled global markets.
In the first four days of the week, the Standard & Poor’s 500 index swung from marking its latest record high to posting its biggest single-day drop in nearly three months.
The negative headlines provided many investors with an opportunity to pocket some of their recent gains after a string of record highs fueled by strong corporate earnings.
“It’s been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea,” said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. “That did temporarily shake investors’ complacency, but we think markets are ready to move higher in the back half of the year, and earnings and economic data are going to drive that.”
The recovery fit a recent pattern of investors using dips to put more money in stocks.
Despite the past week’s decline, the major indexes are in positive territory so far this year, led by the Nasdaq, which is up 16.2 percent. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent.
“If you strip away what’s going on in North Korea, and if you strip away what’s going on in Washington, which are things that are tougher to predict, the economy, the global recovery, earnings, it all paints a very positive picture for the rest of the year,” Kravetz said.
There were fewer signs of anxiousness in the markets Friday. Bond and gold prices, traditional havens for nervous investors, were little changed, and the VIX, a measure of how much volatility investors expect in stocks, fell 3.3 percent after a 44.4 percent jump the day before. It’s still the highest it’s been since May.
Investors also drew some encouragement from new government data showing U.S. inflation at the consumer level inched higher last month. July’s 0.1 percent increase in consumer prices suggests that the Federal Reserve may be less likely to raise interest rates next month.