Stocks post solid gains as technology shares lead rally

U.S. stocks closed with solid gains Friday, the latest shift in a recent stretch of turbulence for the market.

The Dow Jones industrial average rose more than 350 points, or 1.3%, led by technology and health care stocks. Apple gained 3.8% and Microsoft added 2.3%.

Still, the S&P 500 finished with a weekly loss of 0.6%, capping the benchmark index’s first four-week losing streak in more than a year.

The Nasdaq’s more than 2.2% gain was its biggest since Sept. 9, sending it to its first weekly advance following three straight weekly losses.

Technology companies powered much of the broad rally, extending the market’s gains from a day earlier. Stocks have been erratic recently, and indexes have taken several sharp turns in momentum each day.

The S&P 500 rose 51.9 points, or 1.6%, to 3,298. The Dow jumped 358.7 points, or 1.3%, to 26,174. And the Nasdaq climbed 241.3 points, or 2.3%, to 10,913.

The S&P 500 came within striking distance of a 10% drop from its all-time high earlier this week, what Wall Street calls a correction. Friday’s gains reflect, in part, traders taking advantage of the selling to snap up stocks at lower prices, said David Lyon, global investment specialist at J.P. Morgan Private Bank.

“You’re getting a market that got close to a 10% correction, so you’re starting to see buyers step in to buy the dip,” Lyon said.

Fund managers also tend to make moves toward the end of a quarter to bolster their portfolios, another reason for the end-of-the-week buying spree, he said.

Stocks have struggled this month amid a long list of concerns. Chief among them is that stocks may have gotten too expensive following their record-breaking run through the summer, after storming 60% higher. Critics say Big Tech stocks in particular rose too high, even after accounting for their tremendous growth even as the coronavirus weakened the economy.

“This week, and the month of September, is really what we’re calling the give-back month,” Lyon said. ”(Stock) valuations got expensive and this is a natural settling of the market, kind of giving back some of those advance returns that were probably ahead of themselves.”

Recently, investors’ frustration has also grown with the inability of Congress to deliver more aid to the economy after weekly unemployment benefits and other stimulus expired.

Yet another report on Friday suggested that the economy’s recovery is slowing without the support from Capitol Hill. Growth for U.S. orders of machinery and other long-lasting goods was just 0.4% last month, down from 11.7% in July. The figure on durable goods was much weaker than economists had forecast, though several said they saw a mixed picture underneath the headline numbers.

Among other concerns for markets are rising tensions between the United States and China and the possibility that investors’ expectations for a COVID-19 vaccine arriving early next year may prove to be too optimistic.

On top of all the market’s concerns are the pandemic and worries that worsening trends could lead to more profit-choking restrictions on businesses.