The S&P 500 and Nasdaq Composite climbed Friday to finish their best week of the year, as continued strength in earnings reports extended the tech-led rebound from the January rout.
The broad market index added 0.4%, led by a jump in Amazon shares. The Nasdaq Composite rose 1.1%. The Dow Jones Industrial Average fell 67 points, or 0.2%.
For the week, the S&P 500 and Nasdaq were up more than 1% each. The Dow has gained 0.7% week to date. If these gains hold, they would mark the second weekly advances of 2022 for the major averages — which were under pressure last month as worries of higher interest rates dragged down tech names.
Amazon jumped 12% on Friday, while Snap rocketed up around 49% the day after reporting earnings. Pinterest rose about 5%.
Friday’s moves came as traders weighed a much stronger-than-expected jobs report and its potential impact on U.S. monetary policy going forward.
The 10-year Treasury yield jumped above 1.9%, its highest level since January 2020, after the January jobs report showed a 467,000 gain in payrolls. Economists polled by Dow Jones had expected a minor gain of 150,000, and some economists predicted a large decrease. Economists had cautioned before the report it could be noisy because of an omicron wave hitting while the survey was taking place.
The benchmark yield has jumped from 1.51% at the end 2021, as the Federal Reserve pivoted to more aggressively fight inflation, signaling it would slow down its bond buying and raise rates several times this year. Higher rates have weighed on stocks, especially tech shares with high valuations. The S&P 500 is down 6% this year.
Wall Street was coming off a horrid session in which a plunge in Meta shares dragged megacap tech stocks lower. Meta shares suffered their worst day ever on Thursday, dropping 26.4% on the back of disappointing quarterly earnings.
The Nasdaq Composite, which is tilted towards tech shares, fell 3.7% on Thursday for its worst daily performance since September 2020. The S&P 500 had its worst day in nearly a year, sliding 2.4%, and the Dow fell 518.17 points.
“The sharp drop in FB market cap today and the accompanying drag on the S&P500 index is … a stark reminder of the high concentration of mega-cap Tech stocks in the S&P 500 — and the vulnerabilities that such concentration brings,” Goldman Sachs’ Chris Hussey said in a note Thursday.
