Wall Street headed for second straight weekly gain
(Reuters) – The S&P 500 drifted higher on Friday, recovering from early weakness as financial and materials stocks gained ground while investors held out for signs of progress on the next batch of fiscal aid.
Value stocks outperformed large-cap growth stocks as investors favored names likely to benefit from a reopened economy.
The main stock indexes had opened lower, weighed down by heavyweights Apple Inc, Tesla Inc and Amazon.com Inc. The major averages are still headed for their second consecutive weekly gain.
The Lipper data late on Thursday showed U.S.-based stock funds attracted $22.9 billion in the week to Wednesday, the largest weekly inflow since March 2008.
U.S. stock markets will be closed on Monday on account of the Presidents’ day holiday.
“Most of these selloffs have proven just to be some profit taking only to see the market come back from any near-term selloff,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“Low interest rate, stimulus and improvement on the virus front providing greater confidence for investors to stay in the market and buy more.”
A sharp drop in new COVID-19 cases and hospitalizations in recent weeks have also driven markets to historic highs. However, many analysts have cautioned of a near-term pullback amid risks from new coronavirus variants and potential bumps in vaccine distribution.
Latest data showed U.S. consumer sentiment unexpectedly fell in early February as households remained worried about the economy despite expectations for additional fiscal stimulus.
A Reuters poll showed the U.S. economy is expected to reach pre-COVID-19 levels within a year as the proposed $1.9 trillion fiscal package helps boost economic activity, but it’s likely to take over a year for unemployment to fall to early 2020 levels.
U.S. President Joe Biden will meet with a bipartisan group of mayors and governors on Friday as he continues to push for approval of the hefty relief plan.
Economy-linked bank stocks jumped about 1.3%, while energy, materials and industrials also advanced between 0.7% and 0.8%.
The small-cap index was set to rise for the fifth week out of six full weeks this year.
At 11:55 a.m. ET, the Dow Jones Industrial Average fell 5.54 points, or 0.02%, to 31,425.16, the S&P 500 gained 6.81 points, or 0.17%, to 3,923.19 and the Nasdaq Composite rose 22.48 points, or 0.16%, to 14,048.25.
PayPal Holdings Inc rose about 3.8% as several brokerages raised price targets on the stock a day after the payments company’s investor day call.
Walt Disney Co reported a surprise quarterly profit. However, its shares fell 1.5% from a record high after a more than 13% run up to its results over the last two weeks.
Dating app operator Bumble Inc gained 13%, a day after a stellar debut sent its shares up more than 75%.
Tilray Inc and Aphria Inc gained 4% and 6% after nearly halving in value in the prior session.
Advancing issues outnumbered decliners by a 1.3-to-1 ratio on the NYSE and by a 1.4-to-1 ratio on the Nasdaq.
The S&P 500 posted 47 new 52-week highs and no new low, while the Nasdaq recorded 307 new highs and 22 new lows.
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