Stocks Closed Higher on Friday, Recovering from Shaky Start to the New Year
Stocks snapped their five-day losing streak on Friday, with the S&P 500 closing up 1.26% and the Dow Jones Industrial Average advancing 0.8%. The Nasdaq Composite gained 1.77% to close at 19,621.68. Tech stocks, particularly those in the artificial intelligence sector, were a bright spot for the market. Nvidia gained 4.7%, while Super Micro Computer jumped 10.9%. Constellation Energy and Vistra, which stand to benefit from increased spending on artificial intelligence, rose 4% and 8.5%, respectively.
The broad-based rally on Friday was attributed to continued secular growth drivers, with many of the best performers also being strong gainers last year. “The secular growth drivers that have been driving earnings growth and market gains over the last two years, I think they’re still on strong footing and will continue to drive those earnings gains,” said Jeremiah Buckley, portfolio manager at Janus Henderson Investors.
Despite the positive day on Friday, the major averages still ended the week in the red, with the S&P 500 down 0.48%, the Dow Jones Industrial Average down 0.60%, and the Nasdaq Composite down 0.51%. The “Santa Claus” rally, which typically sees stocks gain in the final five trading days of one year and the first two of the next, failed to materialize.
Market strategists noted that the weakness in recent weeks may be an orderly consolidation, rather than the beginning of a more prolonged downturn. News out of Washington, D.C. also had an impact on individual stocks, with U.S. Steel falling 6.5% after the announcement that President Joe Biden would block the proposed acquisition by Nippon Steel. Booze and beer stocks declined after the U.S. surgeon general issued an advisory on cancer risk related to alcohol consumption, with Molson Coors falling 3.4%.
