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Stocks Drift Higher Friday After Rough Thursday

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Stocks rose gently Friday, although risk sentiment was not sturdy. 

All three major U.S. indices rose, wit the S&P 500 up 0.25%. The 10-Year Treasury yield fell to 0.62%, a slightly risk-off signal. The tech-heavy Nasdaq was down 0.2%. 

This was after tech stocks fell almost 1% Thursday and the S&P 500 fell a few percent points. 

Tech stocks continued to be pressured Friday. They've been under pressure of late as earnings roll in against stretched valuations. Investors, during the pandemic, have moved swiftly into shares of big tech companies whose growth drivers can power through the economic headwinds. Netflix  (NFLX)  had been overextended into earnings, on which management said subscriber growth had been pulled forward by the pandemic, but those growth rates will not remain sustainably. The stock had been priced for another leg of explosive growth, with the stay-at-home tailwind the driver. The stock fell almost 7% Friday.

The NYSE FANG Index, fell a few tenths of a percentage point. 

Cyclical sectors like oil, banking and consumer discretionary were between down slightly and up 1%.

Holding back sentiment was a record 72,000 daily new coronavirus cases in the U.S., according to Johns Hopkins data. But cyclical stocks — even small caps — have been beaten down and sent to fairly low valuations. Investors have paused their massive selling of those stocks in the past week or so. 

Consumer sentiment data comes in at 10 EDT Friday and TheStreet will be watching consumer discretionary stocks. 

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