Dow Closes Up Over 450, 1.9%, as Worry About Recovery Eases

Stocks bounce back to end higher, a day after Wall Street sank on worries the economy could take longer to recover from the coronavirus pandemic.
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Stocks finished higher Friday following Thursday's nearly 7% drop in the Dow industrials, which was brought about by worries the economy could take longer to recover if the U.S. sees coronavirus infections resurge.

The Dow Jones Industrial Average finished up 477 points, or 1.9%, to 25,605, the S&P 500 rose 1.31% and the Nasdaq was up 1.01%. 

At its high for the session, the Dow rose 837 points, or 3.3%.

Boeing  (BA) - Get Report, Dow  (DOW) - Get Report, and Raytheon Technologies  (RTX) - Get Report  led the Dow's advance.

All three major indexes were lower for the week: the Dow by 5.6%, the S&P 500 by 4.8%, and the Nasdaq Composite by 2.3%.

Stocks had lost momentum Friday after Wall Street suffered its biggest drop since March but began to show strength late in the session.

On Thursday, the Dow dropped 1,861 points, or 6.9%, to close at 25,128, the S&P 500 sank 5.89%, and the Nasdaq slumped 5.27%.

Many on Wall Street weren't surprised by Thursday's sharp pullback in stock prices.

“The market was ripe for some profit-taking after soaring more than 40% since the March lows," said Greg McBride, chief financial analyst at Bankrate.com. "Add in the reality of a long way to go in the economic recovery and the ever-present worries about a resurgence in the virus and you have the recipe for a selloff.”

"The biggest risk to the stock market is a meaningful recurrence of the coronavirus," said Julie Fox, managing director and northeast private wealth market head at UBS Financial Services. "We need to see a faster-than-expected large-scale production of a vaccine. This would limit major economies reimposing lockdowns."

Coronavirus cases are climbing in nearly half the states in the U.S. as businesses reopen following lockdown measures and stay-at-home orders, according to an analysis from the Associated Press.

The jump in cases has caused the governor of North Carolina to rethink plans to reopen schools or businesses, and Florida reported the highest number of coronavirus cases in a single day since the pandemic began.

Texas has seen more hospitalized covid-19 patients than at any time before, the AP noted.

Houston officials said they were “getting close” to reimposing a stay-at-home order and could reopen a covid-19 hospital that was set up but never used at a football stadium as virus cases rise, Bloomberg reported.

“We may be approaching the precipice of a disaster,” said Harris County Judge Lina Hidalgo, the highest-ranking official in the county, which includes Houston, the fourth-largest U.S. city. “It’s out of hand right now. The good news is it’s not severe out of hand.”

Coronavirus cases in the U.S. have risen to 2.03 million and deaths have increased to 114,065, according to Johns Hopkins University.

Treasury Secretary Steven Mnuchin told CNBC Thursday that shutting down the U.S. economy again wasn't an option, even if the country sees a second wave of infections.

The University of Michigan consumer-sentiment index for early June rose by 6.6 points to 78.9, the most since 2016, but remains below levels seen prior to the coronavirus pandemic.