Stocks rise on Wall Street, trimming their weekly losses

BEIJING –

Stocks rose in afternoon trading on Wall Street Friday, potentially trimming losses for some of the major indexes this week.

The S&P 500 rose 1.2% as of 12:13 p.m. Eastern. The gains pulled the benchmark index up as it hovers near what market watchers call a “correction”, which is when an index sheds more than 10% of its value from a record high. The index hit its latest record on Jan. 3.

The Dow Jones Industrial Average rose 172 points, or 0.5%, to 34,333 and the Nasdaq rose 2%.

Bond yields edged lower. The yield on the 10-year Treasury fell to 1.78% from 1.81% late Thursday.

The S&P 500 is still on track for its fourth weekly loss in a row and the Nasdaq is headed for its fifth straight weekly loss. Broad weekly losses like this haven’t hit the market since September 2020.

The Dow Jones Industrial Average is now in the green for the week after three weeks of losses.

Technology and communications stocks made some of the biggest gains and helped send the broader market higher. Apple rose 5.7% and Facebook parent, Meta, rose 2.2%.

Stocks went on a wild rise this week as investors tried to gauge how the Federal Reserve will move ahead with easing its historic support for markets and the economy. Major indexes spent much of the week swinging sharply from big gains to deep losses and vice versa.

The weekly losses have put every major index on track for their worst monthly loss since the beginning of the pandemic in early 2020.

The central bank plans on raising interest rates to fight rising inflation and investors are concerned about the timing and pace of Fed’s policy shift. The latest statement from the Fed on Wednesday, along with comments from Chair Jerome Powell, revealed that it expects to raise rates “soon” and will phase out monthly bond purchases, which have been intended to lower longer-term rates, in March.

Investors expect the first rate hikes to come in March.

Powell has acknowledged that the high inflation that is squeezing businesses and consumers isn’t loosening its grip and that could force the Fed to act more aggressively about raising interest rates.

The latest round of corporate earnings has shown that companies are still feeling the pinch of supply chain problems, raw material costs and other pressures from inflation.

Oreo cookie maker Mondelez fell 2.9% after issuing its latest warning about inflation hurting operations in North America. KLA, which makes equipment for chipmakers, fell 1% and computer hard drive maker Western Digital fell 6.4% after giving similarly disappointing updates on pressure from inflation.

Additional government reports are also showing that consumers are facing higher prices and they might be discouraging spending. A measure of prices that is closely tracked by the Fed rose 5.8% last year, the sharpest increase since 1982. The report from the Commerce Department also said that consumer spending fell 0.6% in December, with purchases of cars, electronics, and clothes declining.

Inflation concerns and worries about the impact of rising interest rates converged this week with worries about a potential conflict between Ukraine and Russia that could raise energy prices. A conflict could also distract nations from focusing on the lingering virus pandemic, which continues to threaten economic growth with each wave spiking COVID-19 cases.