March 2, 2021

Stocks Hold On to Day’s Modest Gains to End a Wild Week

There was little sign of the volatility seen in the previous four days, and stocks wavered within a relatively tight range. But the indexes failed to fully recover from the week’s wild swings.

“We didn’t fall off a cliff,” said Bruce McCain, chief investment strategist of Key Private Bank. “We are in a market that is trying to bottom, after a gut-wrenching slide, and going into a weekend where people can take a look at it.”

The Standard Poor’s 500-stock index was up 6.17 points, or 0.53 percent, at 1,178.81. It was 1.7 percent lower for the week. The Dow Jones industrial average was up 125.71 points, or 1.13 percent at 11,269.02 and the Nasdaq rose 0.61 percent to 2.507.98.

American stock markets were wildly volatile in the previous four trading sessions, with alternating days of collapsing and then sharply rising prices. There was a 4.4 percent decline on Wednesday and a 4.6 percent climb on Thursday. The mood has swung between speculation about worries over the economy and a renewed financial crisis, and confidence that banks are healthy and corporate profits strong.

“It seems like we have a continuing trend of lighter volume, with successively lower volume in the rise and the fall, which is typical of the market bottoming out,” said Mr. McCain.

Analysts and traders said the turmoil was driven by intensifying worries over European sovereign debt; the Congressional impasse over the debt ceiling; and revisions to economic data, particularly with respect to gross domestic product, that raised concerns over another recession.

The Standard Poor’s downgrade of the nation’s credit rating last week also weighed on the markets. But many said the selling was driven by emotion, and that the S.P. move had been discounted or paled in comparison to other factors, especially the economy and developments in Europe.

Traders suggested a modest drop in claims for unemployment insurance in the United States and reassurances from French officials that their country’s banks were safe may have helped stocks on Thursday. And on Friday, when trading volume was 4.8 billion shares, investors sifted through new data on the economy, including insights into consumer behavior, a crucial element in trying to gauge the pace of the recovery.

The Commerce Department said retail sales rose 0.5 percent in July. Without the volatile automobile and gas components, sales increased 0.3 percent. The figures included several revisions, but they suggested there was some spending momentum in the second quarter and the beginning of the current quarter, at least.

But another piece of data that is indicative of where the market could swing was a survey by the University of Michigan that showed consumer sentiment dipped in August, registering 54.9 points on its index, which was lower than during the crisis of November 2008.

“Clearly, recent financial market turmoil has weighed heavily on sentiment, which was already under pressure from a dysfunctional political arena and the longer-term issue of an ailing labor market,” said Joshua Shapiro, the chief United States economist for MFR, in a research note.

At times, the VIX or “fear index,” a measure of volatility in the market, declined to its lowest point this week. The VIX was 36.87.

United States benchmark 10-year Treasury yields were lower, to 2.24 percent from 2.34 percent on Thursday.

“Going forward, the recent news in the stock market is not a good thing for consumer confidence and spending,” said Chris G. Christopher Jr., the senior principal economist for IHS Global Insight. “The swings in the equity markets are making consumers very nervous.”

But Mr. Christopher and other economists have noted that the recent declines in oil prices will offer some relief to Americans.

Industrial stocks led the way on the S. P. 500, up almost 2 percent, with General Electric up more than 1 percent. Financial stocks pulled back by late afternoon, showing slight losses, but Bank of America was about 1 percent higher.

Bettina Wassener and Julia Werdigier contributed reporting.

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