Wall Street records its first weekly gain since mid-August

(Reuters) – U.S. stocks rose on Friday, with major indexes posting their first weekly gains in four, as investors turned to buying, ignoring concerns about the economic outlook.

The gains followed a sharp selloff that began in mid-August, sparked by concerns about the impact of tight monetary policies and signs of an economic slowdown in Europe and China.

Analysts said the market’s recovery this week was more related to the previous excessive selling as uncertainty remained high over inflation and the Fed’s aggressiveness in raising interest rates.

“It’s no surprise that we get as little of a bounce as we have here, because a lot of this is technical,” said Jack Janasevic, senior portfolio strategist and portfolio manager at Natixis Investment Managers Solutions.

“I wouldn’t be surprised if we started the week a little bit more strongly and then sort of stabilized and give some money while we prepare for the CPI,” he added, looking ahead to next week.

Investors are awaiting the August CPI report on Tuesday for any signs of inflation abating. Prices are expected to show an 8.1% year-over-year rise in August, compared to 8.5% in July.

Wells Fargo economists expect headline inflation to post its biggest monthly drop since the pandemic peaked in April 2020, helped by plunging gas prices.

All 11 major S&P sectors traded higher on Friday, with telecom services (.SPLRCL)technology (.SPLRCT)energy (.SPNY) and consumer appreciation (.SPLRCD) lead the way.

Having been affected since the beginning of the year by concerns about higher interest rates, high-growth stocks rose in the week.

Investors are concerned about the prospect of another massive interest rate hike from the Federal Reserve. On Friday, Fed Governor Christopher Waller said the Fed should be aggressive in raising interest rates while the economy could take a hit, while Kansas City Fed President Esther George said taming inflation could be a difficult task. Read more

The comments come after Federal Reserve Chairman Jerome Powell said on Thursday that the US central bank is “strongly committed” to controlling inflation. Read more

Traders are pricing in a 90% chance of a 75 basis point rate hike at the next meeting, up from 57% the previous week, according to CME Group. Fedwatch أداة.

CBOE Volatility Index (.VIX)A measure of investor anxiety, it closed at a two-week low of 22.79 but remained above its long-term average of around 20.

Dow Jones Industrial Average (.DJI) The index rose 377.19 points, or 1.19%, to 32,151.71 points, the Standard & Poor’s 500 (.SPX) It rose 61.18 points, or 1.53%, to 4,067.36 points, and the Nasdaq Composite (nineteenth) It added 250.18 points, or 2.11%, to 12,112.31.

On the week, the Dow advanced 2.7%, the S&P 500 gained 3.6% and the Nasdaq rose 4.1%.

Bank of America Merrill said on Friday that US equity funds posted outflows of $11.5 billion in the week ending Wednesday, their largest in 11 weeks.

Volume on US exchanges was 9.91 billion shares, compared to an average of 10.24 billion for the full session over the last 20 trading days.

Kroger Company (KR.N) It jumped 7.4% after the grocer raised its annual forecast.

Tapestry shares (TPR.N) It rose 2.7% after the luxury handbag manufacturer said it expects revenue of $8 billion by fiscal year 2025.

Advance issues outnumbered declining issues on the New York Stock Exchange by 5.14 to 1; On the Nasdaq, the ratio was 2.58 to 1 in favor of advanced traders.

The S&P 500 hit seven new 52-week highs and no new lows. The Nasdaq recorded 47 new highs and 63 new lows.

(Carolina Mandel Report), Additional reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Anil de Silva, Magu Samuel and Cynthia Osterman

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