Dow Finishes Higher and Tech Stocks Rebound as Bonds Steady

Stocks end higher Friday and tech stocks rebound as bond yields come off one-year highs.
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Stocks finished higher Friday and tech stocks rebounded after bond yields steadied.

The Dow Jones Industrial Average finished up 572 points, or 1.85%, to 31,496, and the S&P 500 rose 1.95%. The tech-heavy Nasdaq gained 1.55% after trading lower earlier in the session. 

For the week, the Dow industrials advanced 1.8%, the S&P 500 added 0.8% and the Nasdaq Composite gave back 2.1%.

Leading the Dow industrials higher on Friday were oil major Chevron  (CVX) - Get Report, up 4.2%, chipmaker Intel  (INTC) - Get Report, up 4.1%, and health-services group UnitedHealth UNH, up 3.9%.

Among the top Nasdaq 100 gainers, NXP Semiconductors  (NXPI) - Get Report jumped 8.2%. Leading the losers: Okta  (OKTA) - Get Report gave up 4.5% and Tesla  (TSLA) - Get Report lost 3.8%.

Treasury yields stabilized after trading at one-year highs following a better-than-expected U.S. jobs report that had investors again worrying that a recovering economy would boost inflation.

The yield on the benchmark 10-year Treasury was at 1.552% on Friday, off one-year highs.

The U.S. economy added 379,000 jobs in February and the unemployment rate fell to 6.2% as states began lifting lockdown restrictions and COVID-19 cases declined amid improved vaccination efforts.

The data, however, triggered a renewed rise in government bond yields as investors bet on a faster post-pandemic recovery.

"The better-than-expected jobs report suggests a healthy economic rebound in progress and will likely add upward pressure on bond yields, as the bond market prices in a stronger economy, which may result in more consumer spending and eventually more inflation," said James McDonald, chief executive and chief investment officer of Hercules Investments in Los Angeles.

Meanwhile, John McAfee, the antivirus software pioneer who founded McAfee  (MCFE) - Get Report, has been indicted on fraud and money laundering conspiracy charges stemming from two cryptocurrency schemes, the U.S. Department of Justice said on Friday.

He founded the software company McAfee Associates  in 1987 and ran it until 1994, when he resigned.

The S&P 500 fell Thursday and the tech-heavy Nasdaq dropped 2.11% as Treasury yields jumped after Federal Reserve Chairman Jerome Powell disappointed investors by not taking a firmer stance against rising inflation and heightened bond market volatility. The Nasdaq turned negative for the year.

Powell said the recent surge in Treasury yields caught his attention but that the central bank would be patient before changing policy even if inflation were to tick higher.

"The market’s translation of 'patient' is that patient doesn’t mean 'never,' and that Powell is indicating that easy money will at a certain point come to an end," said Mike Loewengart, managing director of investment strategy at E-Trade.

"So while the verbiage isn’t too far away from the Fed’s previous stance, it’s enough to move a jittery market south. It’s a safe assumption that the Fed won’t act any time soon, but clearly inflation is in their crosshairs," he added.

Dave Portnoy Isn't Sweating Thursday's Market Selloff

Oil prices rose Friday after members of the OPEC+ alliance agreed to leave crude production unchanged.

West Texas Intermediate crude rose 3.81% on Friday to $66.26 a barrel. 

The Senate, meanwhile, began debating President Joe Biden's $1.9 trillion stimulus bill. Approval of the package - the nation's sixth stimulus package in about a year since the pandemic began - could come this weekend.