Wall Street may have weathered a terrible January, but at least the last trading day of the month was upbeat.
Stocks closed at session highs on Friday, with the Dow Jones Industrial Average up nearly 400 points while the S&P 500 climbed 2.5%. Markets were bolstered by better-than-expected earnings reports from the likes of Microsoft (MSFT) and Visa (V) , a U.S. economy slowly chugging along and a surprise stimulus from the Bank of Japan.
But for the month as a whole, the markets remained down. Stocks started off the year with wild swings fueled by worries over China's growth, uncertainty over the Federal Reserve's rate hike timeline, so-so earnings, and a continued slump in oil prices.
The S&P 500 is down 5.2% for the month, the Dow has fallen 5.6%, and the Nasdaq has slipped 8%. And the selloff might not be over just yet, according to some market watchers.
"It would not be surprising if the S&P 500 does, once again, test the new correction lows reached earlier this month," said Jim Paulsen, chief investment strategist at Wells Capital Management. "However, improved valuations, refreshed investor sentiment, a significant rally in both crude oil prices and raw industrial commodity prices and a surprising month of outperformance by emerging market stocks does spread a little cheer to chew on at the end of a dreadful month."
It remains to be seen whether the first pieces of economic data from the current quarter, due next week, will help stocks inch higher or prompt a wild ride back down. On the docket are personal income numbers and a snapshot of the manufacturing sector, to be be released on Monday, and the all-important January jobs report on Friday.