Wall Street Stages Late Rally to End Losing Streak

Michael Teague  |

The S&P 500 bounced back to a 0.85 percent gain, closing at 1,622.56 points, while the Dow advanced 0.53 percent to 15,040.62, and the Nasdaq jumped 0.66 percent to 3,424.05 in a dramatic and unexpected comeback.

The growing uncertainty over the last two weeks about the duration and scale of the Federal Reserve’s quantitative easing program has begun to give investors cause for concern about the sustainability of the considerable advances made by equities in 2013.

With Japan’s attempt at Fed-style stimulus proving so far unsuccessful, the world’s central banks, who only a week ago seemed prepared to go full throttle on their own stimulus programs, are now appearing hesitant. The Nikkei 225 showed itself impervious to the Bank of Japan’s attempts jumpstart the economy and reverse deflation, closing lower once again at a loss of 0.85. Meanwhile, European Central Bank chief Mario Draghi announced on Thursday that interest rates would remain at their current levels, sending European stocks downward as well.

In the U.S., economic data was hinged mostly on Friday’s jobs report, after it was announced that initial jobless claims fell 346,000, only slightly more than economist predictions of 345,000. With analysts expecting the economy to add 163,000 jobs in May, 2000 jobs less than were added in April, the Bureau of Labor’s job numbers are heavily anticipated, as it is widely believed that the results will have some bearing on Fed policy in the near future.

On the S&P 500, tech stocks benefitted from Thursday’s rally, with JDS Uniphase (JDSU), First Solar (FSLR), Verizon Communications (VZ) and Sprint Nextel (S) all posting substantial increases.

Streaming video service Netflix (NFLX) was down over 2.5 percent. The day after it lost its distribution deal with Viacom (VIA), it gained a new competitor in Redbox Instant. The company announced it was expanding from its increasingly ubiquitous DVD-rental kiosks to the streaming market itself with the announcement that the five million users of the gaming system Roku will now have access to the company’s streaming service.

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