By Mark DeCambre and Barbara Kollmeyer
U.S. stocks on Friday finished on a decidedly higher note, booking sharp gains in a final swing higher in the last hour of trading, which helped to erase sharp weekly declines and snap multiweek losing streaks for all of the major benchmarks.
What did stock benchmarks do?
The S&P 500 index SPX rose 2.4% to 4,431.85, ended notably higher after trading at an intraday low at 4,292.46, which had put the broad-market benchmark down more than 10% below its Jan. 3 closing peak, and would have met the commonly used criteria for a correction.
The Dow Jones Industrial Average DJIA gained 1.7%, or 565.69 points, to 34,725.47.
The Nasdaq Composite Index COMP closed up 417.79 points, or 3.1%, at 13,770.57.
The small-capitalization Russell 2000 index /zigman2/quotes/210598147/delayed RUT +1.10% was trading 1.9% higher at 1,968.51, after touching an intraday low at 1,901.36, following its entering a bear market on Thursday for the first time in 2 years .
For the week, the Dow booked a gain of 0.8%, the S&P 500 index climbed 1.3%, the Nasdaq Composite finished up 0.01% higher, but the Russell 2000 still finished down 1% for the week, FactSet data show. That marked its fourth straight weekly decline, representing the longest such trend since December.
The S&P 500, Dow avoided four-week losing streaks; while the Nasdaq Composite narrowly avoided a fifth straight weekly decline, which would have marked the longest such slump since a six-week tumble back in 2012, spanning October into November of that year.
What drove the market?
Equity markets turned higher in another wild day of trading to end the week, expunging weekly declines in the process.
The gains came mostly in the final hour of trading, which has turned into a new witching hour on the Street and came as investors parsed fresh U.S. economic data and upbeat earnings from Apple as promising.
Reports showed U.S. consumer spending falling 0.6% in December, amid a wave of COVID-19 cases from the highly contagious omicron variant of coronavirus.
Meanwhile, a measure of U.S. inflation preferred by the Federal Reserve climbed 5.8% in 2021 after another increase in December. Employment costs rose 1% in the fourth quarter. Separately, a reading of consumer sentiment slumped to a 10-year low as inflation concerns mount, underscoring the waning appetite for assets perceived as risky.
“The slowdown in consumer spending during December saw personal spending levels decline sharply by 0.6%, while the latest Michigan sentiment numbers showed US consumers were more worried about inflation than at any time in the last 10 years,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a daily note.
A volatile month has whipsawed investors, who have juggled worries over the pace of Federal Reserve interest rate increases, a mixed earnings reporting season, the continuing pandemic fallout and geopolitical worries surrounding a potential Russia invasion of Ukraine.
Questions over the Fed’s plans to tackle inflation have hit interest rate-sensitive technology and growth stocks particularly hard. This week’s Fed meeting produced no change in interest rates, but Chairman Jerome Powell didn’t rule out a potential rate increase at each meeting this year, and said the central bank needed to be “nimble.”
Positive news came from Apple /zigman2/quotes/202934861/composite AAPL +4.01% , whose shares were up nearly 7% after the iPhone maker sailed past Wall Street’s earnings expectations for the holiday quarter, and executives forecast continued revenue growth in the current quarter. Earnings topped $30 billion for the first time, and the results mark a high point in a thus-far mixed reporting season.