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 Slammed by collapsing oil prices that have fed doubts about the
health of the global economy, stocks have had a volatile start to
the year. At one point last week, the S&P's loss for 2016 reached 11
percent before recovering to end the month down 5 percent.
The index rose 2.48 percent on Friday, its strongest day since
September.
"Sentiment certainly had swung to a wildly negative scenario. In the
short term, I’m not sure the sentiment backdrop we’ve seen was
warranted," said Michael Church, president of Addison Capital
Management in Philadelphia.
"What happens if there is not a recession? What happens if China
stabilizes and the Fed doesn't raise rates aggressively?"
Global equities got a surprise boost on Friday after Japan's central
bank cut a benchmark rate below zero to stimulate its economy.
Stocks were also lifted by weak fourth-quarter U.S. gross domestic
product growth data, which bolstered arguments that the Federal
Reserve might go slower than expected on future rate hikes.
While the Fed has not ruled out a rate hike in March, many investors
believe recent global economic and financial turmoil may lead it to
wait.
Microsoft shares <MSFT.O> jumped 5.83 percent on
better-than-expected results.
The software company was the biggest influence on the S&P 500 and
the Nasdaq and helped push the S&P tech sector up 3.6 percent, its
strongest session since August.
Fourth-quarter corporate reporting season is well under way, with
S&P 500 companies on average expected to post a 4.1 percent drop in
earnings, according to Thomson Reuters I/B/E/S. Excluding energy
companies, earnings are seen rising 2.1 percent.
The Dow Jones industrial average <.DJI> ended 2.47 percent higher at
16,466.30 while the S&P 500 <.SPX> gained 46.88 points or 2.48
percent higher to end at 1,940.24.
The Nasdaq Composite <.IXIC> surged 2.38 percent to 4,613.95.
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For the week, the Dow gained 2.3 percent, the S&P added 1.7 percent
and the Nasdaq increased 0.5 percent.
That left the Dow down 5.5 percent for the month and the Nasdaq 7.9
percent lower, its largest monthly loss since May 2010.
In Friday's trading, Amazon <AMZN.O> slumped 7.61 percent after its
quarterly profit missed expectations.
Xerox <XRX.N> gained 5.63 percent after announcing a deal with Carl
Icahn to split itself into two.
U.S. crude oil <CLc1> rose 1.4 percent after trimming early gains on
a report that Iran would not participate in a possible deal between
OPEC and other producing countries to reduce output.
Advancing issues outnumbered decliners on the NYSE by 2,789 to 339.
On the Nasdaq, 2,290 issues rose and 584 fell.
The S&P 500 index showed 16 new 52-week highs and seven new lows,
while the Nasdaq recorded 28 new highs and 100 new lows.
About 10.0 billion shares changed hands on U.S. exchanges, above the
8.3 billion daily average for the past 20 trading days, according to
Thomson Reuters data.
(Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by
Nick Zieminski and James Dalgleish)
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