Stocks rose Friday as investors continued evaluating earnings reports and tougher language from Federal Reserve speakers.
The Dow Jones Industrial Average jumped 243 points, or 0.7%. The S&P 500 and the Nasdaq Composite climbed 0.7%.
All of the major averages are on pace for losing weeks — the Dow is down for the week by 0.6%, while the S&P and Nasdaq are lower by 1.2% and 1.6%, respectively. All three are positive for the month, however.
Ross Stores and Palo Alto Networkspoppedafter the two companies posted their latest quarterly results. Investors also appeared to cheer Gap’s most recent results.
Friday’s moves come after a down session on Wall Street after comments from Federal Reserve officials raised concern over tighter U.S. monetary policy.
St. Louis Federal Reserve President James Bullardsaid Thursdaythat“the policy rate is not yet in a zone that may be considered sufficiently restrictive.” He suggested that the appropriate zone for the federal funds rate could be in the 5% to 7% range, which is higher than what the market is pricing.
Investors have responded to each new piece of economic data or any language in recent weeks that could indicate what the Fed will do next with interest rates, said Shelby McFaddin, investment analyst at Motley Fool Asset Management. In this case, she said the comments on inflation led investors to believe the Fed does not think the economy has cooled enough.
“There’s absolutely been a thirst for relief and a tug of war,” she said of investor response over recent days. “But at the end of the day, it really just depends on this inflationary period becoming deflationary slower than it ramped up, and on what the Fed decides to do next.”
Comments