U.S. stocks rose Friday after China’s central bank unexpectedly cut a key interest rate in a bid to boost its economy, although major indexes remained on course for weekly losses.
The S&P 500 climbed 0.3% after narrowly avoiding entering a bear market, or a 20% decline from its last peak, during a choppy trading session Thursday. The Nasdaq Composite advanced 0.3%, and the Dow Jones Industrial Average rose 52 points, or 0.2%.
Stocks have continued to be whipsawed by fears about the health of the U.S. and global economy. Technology stocks began the week higher, only to tumble in subsequent days as investor worries about how far the Federal Reserve will go to rein in inflation drove selling of the stock market’s priciest shares.
The pain spread beyond the technology sector, too. Major retailers reported their profits being hurt by rising costs and supply-chain disruptions, driving a selloff that led to Target and
Walmart’s
worst one-day decline since the Black Monday crash of 1987.
Markets got some reprieve Friday after China’s central bank lowered an interest rate that acts as a benchmark for mortgages, a move that analysts expect will help support the country’s housing market. But investors and analysts say they expect tightening financial conditions in the U.S. will continue to pressure markets.
“We still need to build more evidence to convince markets that a soft landing is possible,” said
Arun Sai,
a multiasset strategist at Pictet Asset Management, referring to the Fed’s goal of slowing the economy enough to contain inflation but not so much that it causes a recession.
The S&P 500 and Nasdaq are on course for their seventh straight weekly loss, their longest such losing streak since 2001, according to Dow Jones Market Data. The Dow is on course for an eighth straight weekly decline, its longest such streak since 1932.
Shares of
fell 23% after it posted a decline in sales and said it expects another drop this quarter. The retailer, like many other businesses, said its results were hurt by rising costs for transportation and labor.
Agricultural equipment maker
dropped 9.9% even though it posted higher sales and profit on strong demand. Its chief executive said supply-chain issues disrupted production levels and deliveries.
Meanwhile,
rose 6.2% after its chief financial officer said he expects the retailer’s full-year earnings to be at the upper end of guidance.
added 12% after the cybersecurity company reported quarterly revenue that beat analysts’ expectations.
“Earnings season has been good—there are slightly more companies than usual beating expectations. The question is from the next quarter onward, where we will have the full impact of the jump in oil prices and the war in Ukraine,” said
Kiran Ganesh,
a multiasset strategist at UBS.
A trader worked on the floor at the New York Stock Exchange on Thursday.
Photo:
Seth Wenig/Associated Press
Overseas, the Stoxx Europe 600 added 1.5%. Asian stocks also rose, with the Shanghai Composite climbing 1.6% and Hong Kong’s Hang Seng jumping 3%.
Oil prices edged up with Brent crude rising 0.4% to trade at $112.52 a barrel.
Government bonds have largely rallied this week as they typically perform well in times of economic stress.
The yield on the benchmark 10-year Treasury edged down on Friday to 2.850% from 2.854% on Thursday, extending the drop into a third day. Prices rise when yields fall.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Akane Otani at akane.otani@wsj.com
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