S&P 500 Closes Nearly Flat After Dipping Into Bear Market Territory

Stocks experienced another extremely volatile session during trading on Friday, with the major averages once again showing wild swings as the day progressed.

The major averages pulled back sharply after failing to sustain an early upward move but staged a significant recovery attempt going into the close.

After plunging more than 600 points at its worst levels, the Dow edged up 8.77 points or less than tenth of a percent to 31,261.90.

The S&P 500 also ended the day roughly flat, inching up 0.57 points or less than a tenth of a percent to 3,901.36, while the Nasdaq dipped 33.88 points or 0.3 percent to 11,354.62.

Primarily reflecting the sell-off on Wednesday, the major averages all posted steep losses for the week. The Nasdaq dove by 3.8 percent, while the S&P 500 and the Dow tumbled by 3 percent and 2.9 percent, respectively.

The extended volatility on Wall Street came as traders continued to debate when the markets will reach a bottom following recent weakness.

At its low for the session, the S&P 500 was down more than 20 percent from January’s record closing high, which is seen as signaling a bear market.

Light trading activity may also have contributed to the volatility, with a lack of major U.S. economic data keeping some traders on the sidelines following the release of a slew of data earlier in the week.

Traders may also have been looking ahead to next week’s reports on new home sales, durable goods orders, and personal income and spending as well as the minutes of the latest Federal Reserve meeting.

Sector News

Computer hardware stocks climbed well off their worst levels but still ended the day notably lower, resulting in a 2.9 percent slump by the NYSE Arca Computer Hardware Index.

Significant weakness also remained visible among airline stocks, as reflected by the 1.4 percent drop by the NYSE Arca Airline Index.

On the other hand, pharmaceutical stocks moved sharply higher on the day, driving the NYSE Arca Pharmaceutical Index up by 2 percent.

Healthcare stocks also turned in a strong performance, with the Dow Jones U.S. Health Care Index climbing by 1.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while Hong Kong’s Hang Seng Index spiked by 3 percent.

The major European markets also moved to the upside on the day but closed well off their best levels. While the U.K.’s FTSE 100 Index shot up by 1.2 percent, the German DAX Index climbed by 0.7 percent and the French CAC 40 Index edged up by 0.2 percent.

In the bond market, treasuries climbed firmly into positive territory amid the sell-off on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.8 basis points to 2.787 percent.

Looking Ahead

Next week’s trading may be impacted by reaction to reports on new home sales, durable goods orders, and personal income and spending as well as the minutes of the latest Federal Reserve meeting.

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