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Oct. 1, 2021, 5:07 p.m. EDT

U.S. stocks finish sharply higher Friday, but S&P 500 still books biggest weekly drop since February

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By Christine Idzelis and Mark DeCambre

U.S. stocks ended sharply higher Friday after a batch of mixed economic data, kicking off October with gains although major indexes posted losses for the week.

Initial optimism on Wall Street was pegged partly to news that Merck & Co . /zigman2/quotes/209956077/composite MRK -0.74% and partner Ridgeback Biotherapeutics, said their oral antiviral treatment for COVID-19 reduced the risk of hospitalization or death by 50% for patients with mild or moderate cases.

How did stock-market indexes trade?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.17% rose 482.54 points, or 1.4%, to close at 34,326.46.

  • The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.84% climbed 49.50 points, or 1.2%, to finish at 4,357.04.

  • The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.92% advanced 118.12 points, or 0.8%, to end at 14,566.70.

For September, the Dow lost 4.3% and the S&P 500 fell 4.8% to snap a seven-month winning streak. The Nasdaq Composite was off 5.3%, its worst September in a decade. For the third quarter, the Dow fell 1.9%, the S&P 500 was up 0.2% and the Nasdaq Composite rose 0.4%.

This week, the Dow fell 1.4%, its biggest weekly decline since the week ending September 10, according to Dow Jones Market Data. The S&P 500 lost 2.2% for the week, its largest percentage drop since the week ending February 26. The Nasdaq saw a 3.2% weekly drop, also its biggest decline since the week ended February 26.

What drove the market?

Equity markets were choppy Friday, moving higher in the afternoon after relinquishing modest opening gains, as investors assessed a batch of mixed data on the U.S. economy.

U.S. personal spending and incomes provided further evidence that the cost of goods and services are rising, with the rate of U.S. inflation at a 30-year high, and all signs pointing to price pressures snaking into next year.

“People will tell you that they’re gloomy, but they’re not acting like they’re gloomy,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab, in a phone interview Friday. “People are still spending.”

The personal consumption expenditure price index climbed 0.4% in August,  the government said Friday , marking the sixth straight increase. The rate of inflation in the 12 months ended in August edged up to 4.3% from 4.2%—the highest rate since 1991, when George H.W. Bush was president.

The Institute for Supply Management manufacturing index for September also rose to 61.1 from 59.9 in the prior month. A reading of 50 or better indicates improving conditions.

“That’s a really good print,” said Megan Greene, global chief economist at Kroll Institute, in a phone interview Friday. “I think most of us were expecting it to slow down a bit.”

Ahead of the morning’s ISM data, a report on Merck’s expe rimental drug helped bulls make a case for higher stocks, but concerns over the U.S. debt-ceiling debate in Washington, D.C. may act as a damper as a deadline to lift it looms.

“Every day we go by where they don’t have a deal, that’s just one more reason for the market to get volatile and people to get nervous,” said Frederick. “I just hope they get this resolved sooner rather than later.”

/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 73.34
-0.55 -0.74%
Volume: 14.51M
Dec. 3, 2021 4:02p
P/E Ratio
25.89
Dividend Yield
3.76%
Market Cap
$186.64 billion
Rev. per Employee
$648,824
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,580.08
-59.71 -0.17%
Volume: 444.85M
Dec. 3, 2021 5:35p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,538.43
-38.67 -0.84%
Volume: 2.71B
Dec. 3, 2021 5:35p
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/zigman2/quotes/210598365/realtime
US : Nasdaq
15,085.47
-295.85 -1.92%
Volume: 4.96M
Dec. 3, 2021 5:16p
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