Stocks closed another bumpy day with solid gains on Wall Street, but not enough to erase the market’s worst weekly loss since late March.
The S&P 500 rose 1.3% Friday, a day after dropping nearly 6%, closing at 3,041.
The Dow Jones industrial average shot up 477 points, or 1.9%, to close at 25,605. The Nasdaq rose 1% to close at 9,588.
The volatility interrupted what had been a dramatic rally for the market over the past three weeks. Stocks turned wobbly this week as investors re-evaluated their expectations for economic growth, which many skeptics have been saying were overly optimistic.
Small-company stocks and bond yields rose, meaning investors were a bit more willing to take on risk again a day after the heavy market rout.
Gains by technology, financial and real estate stocks outweighed losses in utilities and companies that rely on consumer spending. Companies that were among the biggest losers Thursday were big gainers, including airlines and cruise lines.
The rebound for stocks is a reversal for the market, which sold off for three days in a row as a rise in COVID-19 cases in the U.S. and a discouraging economic outlook from the Federal Reserve dashed investor optimism for a quick economic recovery as states lift stay-at-home orders and businesses reopen.
“Yesterday was the market taking a needed breath and saying ’OK, this is probably going to take more time than we were expecting,” said Willie Delwiche, investment strategist at Baird. “Today, it’s ‘maybe we overreacted yesterday.’”