Wall Street rallied on Friday, led higher by Apple and Microsoft, as investors finished a turbulent week of trading and some states prepared to relax coronavirus-related lockdowns. The TSX also closed higher, with another rally in crude oil prices providing support to Canadian market sentiment.
Apple and Microsoft each climbed more than 1%, lifting the S&P 500 more than any other companies. The two tech titans are on tap to report their March-quarter results next week, giving investors a glimpse at how the pandemic has affected their global businesses.
Boeing Co tumbled more than 6% after a report the planemaker was planning to cut 787 Dreamliner output by about half.
All of the 11 S&P 500 sector indexes moved up, with information technology jumping 2.1% and materials rallying 1.5%.
Even with Friday’s gains, the S&P 500 ended the week lower, with investors fearful of a deep economic slump following a near-crash in April business activity and weekly jobless claims topping 26 million in five weeks.
The index has recovered more than 25% from its March low and expectations are growing that more businesses will be allowed to reopen as coronavirus infections showed signs of peaking.
Georgia became the first state to push ahead with its plan to allow an array of small businesses to reopen on Friday despite disapproval from President Donald Trump and health experts.
Investors may be overestimating how quickly U.S. businesses can go back to normal, and the S&P 500 could fall 5% or more as it becomes evident that resuming normal economic activity may not happen for months, warned Eric Freedman, chief investment officer at U.S. Bank Wealth Management in North Carolina.
“We think this is likely to be a little bit of a sideways market, and we won’t be surprised to see a bit of downside before we see more upside,” Freedman said.
Overall, analysts still expect a 15% decline in S&P 500 first-quarter earnings, with profits for the energy sector estimated to slump more than 60%, raising fears of debt defaults, layoffs and possible bankruptcies.
New orders for key U.S.-made capital goods unexpectedly rose in March, but the gains are not likely to be sustainable amid the pandemic, which has abruptly shut down the economy and contributed to a collapse in crude oil prices.
The CBOE volatility index, known as Wall Street’s fear gauge, was down for the third straight session.
Amazon rose 0.4% to a record high close ahead of its quarterly report on Thursday. With online shopping booming as people avoid traditional stores, Amazon’s stock market value has ballooned by over $100 billion since Feb. 19, just before coronavirus fears gripped Wall Street.
The Dow Jones Industrial Average jumped 1.11% to end at 23,775.27 points, while the S&P 500 gained 1.39% to 2,836.74.
The Nasdaq Composite added 1.65% to 8,634.52.
For the week, the S&P 500 fell 1.3%, the Dow lost 1.9% and the Nasdaq lost 0.2%.
The S&P/TSX composite index gained 169.27 points on Friday to 14,420.36. For the week, it gained less than half a percentage point.
The Canadian dollar traded for 70.97 cents US compared with an average of 71.11 cents US on Thursday.
The June crude contract was up 44 cents at US$16.94 per barrel and the June natural gas contract was down 4.7 cents at US$1.90 per mmBTU.
The June gold contract was down US$9.80 at US$1,735.60 an ounce and the May copper contract was up 2.5 cents at US$2.34 a pound.
Read more: Market movers: Stocks that saw action on Friday - and why
Reuters, The Canadian Press, Globe staff
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