Stock market live Friday: Dow up 477, Stocks still lose 5% on week, volatility is back

Stocks surged at the start of Friday’s trading in a bid to recover some of Thursday’s steep losses. The Dow jumped 837 points, but some of those gains were to be short lived. The major averages pulled back from their highs as some of the enthusiasm faded, but all three posted at least a 1% gain for the day. Friday’s move higher couldn’t make up for losses earlier in the week, however, and the major averages finished the week lower.

Here’s what happened:

• The Dow gained 1.9% for its first positive day in four
• For the week the Dow lost 5.55% in its worst weekly performance since March 20
• The Dow is 13.4% below its intraday all-time high of 29,568.57 from Feb. 12
• The Dow is 40.58% above its 52-week low from March 23
• The S&P 500 gained 1.31% for its first positive day in four
• For the week the S&P fell 4.67% in its worst weekly performance since March 20
• The S&P is 10.38% below its intraday all-time high of 3,393.52 from Feb. 19
• The S&P is 38.75% above its 52-week low of 2,191.86 from March 23
• All sectors ended the week lower. Energy was the worst performer, losing 11.07% in its worst week since March. Tech was the week’s top performer after falling just 2.03%
• The VIX hit its highest level since April 22 during Friday’s session. – Francolla

The major averages moved higher on Friday, clawing back some of Thursday’s steep losses. The Dow gained 477 points to finish the session 1.9% higher. The S&P 500 rose 1.3%, while the Nasdaq Composite gained 1%. The gains weren’t enough to counteract the week’s earlier losses, however, and all three averages ended the week lower, snapping a three-week winning streak. – Stevens

With just under an hour left in trading, the major averages were higher, although still below their highs of the session. The Dow was up about 300 points for a gain of 1.2%. The S&P 500 rose 0.8%, while the Nasdaq traded 0.5% higher. All three remain on track to post steep losses for the week. – Stevens

With about 2 hours left in the trading day, the 30-stock Dow briefly dipped into the red. After surging more than 800 points to start the day on Friday, the Dow last traded up 13 points. – Fitzgerald

Amid a wild week of trading in the market one name stands out: Nikola Corporation. Shares of the battery-electric and hydrogen-electric truck maker doubled on Monday – just two days after the company began trading – and the following days saw the stock swing between gains and losses. The rate at which investors piled into the stock led to skepticism around whether the move is supported by the company’s underlying fundamentals, especially since Nikola has said it doesn’t expect to generate revenue until 2021. Founder Trevor Milton hit back at critics on Friday, saying “they think they are doing Nikola Motor harm but it actually makes us stronger and people love us more.” – Stevens

Stocks continued to fall from their highs of the day in afternoon trading, with the S&P 500 dipping into negative territory at one point. The Dow last traded 116 points higher – after earlier gaining more than 800 points – while the S&P 500 advanced 0.3%. The Nasdaq Composite was flat. – Stevens

After what will likely be the first down week in four, JPMorgan said it feels comfortable getting more bullish and buying the dip in the market. “With the recent market pullback, we are again more comfortable with taking a positive view – as positioning in equities did not increase significantly and China risks appear to be abating,” JPMorgan’s global quantitative and derivatives strategist, Marko Kolanovic, said in a note to clients on Friday. Kolanovic sees equity investors getting off the sidelines if volatility stays at these heightened levels. “Over the summer, if volatility stays at these levels, systematic investors will likely add to equity exposure and at some point HFs will likely follow, or will opportunistically buy the dips,” he added. – Fitzgerald

The major averages were up sharply on Friday as Wall Street tried to regain its footing following the steep market drop on Thursday. The Dow jumped 477 points, or 1.9%. The S&P 500 advanced 1.5% while the Nasdaq gained 1.4%. Still, the Dow and S&P 500 remain on pace for their biggest one-week decline since March. — Imbert

The Cboe Volatility Index, a measure of investor fear, continued to spike on Friday as the stock market swung for a second day. The index is above the 42 level. Earlier in the week it was around 26. The index has surged after a 1,800 point drop for the Dow Jones Industrial Average on Thursday, followed by a rebound on Friday. – Fitzgerald

Some of Thursday’s hardest-hit names surged during early trading on Friday. – Francolla, Stevens

CNBC’s Jim Cramer argued Wall Street investors may be tricking amateur investors on platforms such as Robinhood by piling into beaten-up but popular stocks like airlines. “It’s a game. If it weren’t securities, let’s say it was monopoly, let’s say it’s Draft Kings … it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.” The “Mad Money” host referenced shares of American Airlines and Carnival Corp. as two examples. Both stocks were up double-digits in premarket trading at the time of his comments. 

“If people wanted these stocks, there would be plenty of supply if they would just wait until 9:30 a.m.,” Cramer said later on “Squawk on the Street.” “But no, they’re fomenting action. Once you foment action, it brings in suckers and then maybe they’ll buy the stock thinking that there’s something going on.” – Stankiewicz

Data compiled by the University of Michigan’s Surveys of Consumers showed U.S. consumer sentiment advanced more than anticipated this month. The index of consumer sentiment came in at 78.9. Economists polled by Dow Jones had forecast a print of 75. Richard Curtin, chief economist of Surveys of Consumers, said sentiment was “paced by gains in the outlook for personal finances and more favorable prospects for the national economy due to the reopening of the economy.” Curtin noted, however, that “bad times financially in the economy as a whole during the year ahead were still expected by two-thirds of all consumers, and a renewed downturn was anticipated by nearly half over the longer term.” —Imbert

Shares of banks and other financial companies rose in early trading on Friday after being hammered during Thursday’s sell-off. Citigroup, which dropped more than 13% in the previous session, surged 5.9% in the opening minutes. Wells Fargo and Morgan Stanley both rose more than 4%, while Goldman Sachs gained 3.9%. —Pound

Shares of major tech-related companies rose broadly along with stocks benefiting from the reopening of the economy. Facebook, Amazon and Alphabet all rose at least 2%. Netflix gained 1.7% while Apple advanced 3.2%. Recently, some of these stocks lagged groups such as airlines and cruise operators as expectations of an economic recovery increased. —Imbert

Stocks most sensitive to the economy’s reopening bounced back on Friday, after finishing Thursday’s session sharply lower. The SPDR S&P Retail ETF (XRT) gained more than 3%, while the NYSE Arca Airline index rallied more than 11%, led higher by a 15% pop for American Airlines. United and Delta were each up more than 10%, while JetBlue rallied 9%. Royal Caribbean, Norwegian Cruise and Carnival Corporation all gained more than 11%, although these stocks are still sharply lower for the week. – Stevens

The major U.S. stock indexes opened higher across the board on Friday and pared some of the steep losses suffered in the prior session. The Dow rallied 680 points immediately after the opening bell, a gain of 2.7%, while the S&P 500 added 2.5%. The Nasdaq Composite, the relative laggard, climbed 2.3%. The gains on Friday came after the major indexes clinched their worst day on Wall Street since March on Thursday. — Franck

• Goldman Sachs downgraded Tesla to neutral from buy.
• Morgan Stanley downgraded Tesla to underweight from equal weight.
• Goldman Sachs upgraded General Motors to buy from hold.
• BMO downgraded Caterpillar to market perform from outperform.
• Credit Suisse upgraded Southwest Airlines to outperform from neutral.
• Credit Suisse downgraded United Airlines to neutral from outperform.
• MKM upgraded Take-Two to buy from neutral.
• Guggenheim initiated WW as buy.
• SunTrust upgraded Dave & Buster’s to buy from hold.

CNBC PRO subscribers can read more here. — Bloom

Shares of Tesla have surged more than 100% this year, and Wall Street firms think Elon Musk’s automaker may have gotten ahead of itself. Morgan Stanley and Goldman Sachs both downgraded the stock on Friday, citing a stretched valuation, among other factors.  

CNBC PRO subscribers can read more here. — Stevens

The companies that would benefit most from a total reopening of the U.S. rallied the most in the premarket session Friday morning as the so-called reopening trade returned on the week’s final day of trading. American and United Airlines rose 9.6% and 9.7%, respectively, while cruise operators Carnival Corp. and Norwegian gained 11.2% and 10.6%. Retailers Gap and Kohl’s advanced 5.6% and 7.2%; Simon Property Group, one of the largest owners of mall space in the U.S., added 5.8%. — Franck

While the growth trend in coronavirus cases nationally has abated, several states are seeing spikes and are raising concerns of a second wave of the disease. One of the states seeing the largest increases in cases is Arizona, which saw 1,412 new cases on Thursday as the state hospital system faces increasing strains to deal with the increased caseload. In addition to a 4.7% gain in cases, hospitalization rose 1.6% and has surged 80% since Memorial Day, according to the Covid Tracking project. Area hospitals report being at 84% capacity for inpatient beds and 78% for intensive care. State officials, though, are reluctant to impose new stay-at-home measures. Arizona Gov. Doug Ducey said the state still has 2,600 hospital beds and 600 ICU beds for surge cases. — Cox

Rental car company Hertz has asked a bankruptcy judge to allow a secondary stock sale, according to the Wall Street Journal. The plan would allow Hertz to sell just under 250 million additional shares. The stock, which had a market cap of roughly $293 million as of Thursday’s close, has jumped 50% in premarket trading. The stock has been extremely volatile in recent days and is a favorite of retail traders. — Pound

Though Wall Street appeared set on Friday to recover some of its losses from earlier in the week, all three major indexes remained on track to clinch sizable slumps for the week. The S&P 500, Dow Jones and Nasdaq Composite have slid 6%, 7.3% and 3.2%, respectively, since Monday through Thursday’s close. The vast majority of those losses were incurred on Thursday as rising numbers of Covid-19 cases in the U.S. and profit-taking sent the Dow down more than 1,800 points (or 6.9%) for its worst day since March. The S&P 500 fared little better on Thursday with a drop of 5.89%. — Franck 

Wall Street’s fear gauge — the Cboe Volatility Index — dipped 8.5% in morning trading to  37.31 as stocks tried to rebound from a brutal sell-off in the previous session. The VIX jumped nearly 50% Thursday to close at 40.79, marking the first time the gauge has crossed the 40 threshold since May 4. The gauge tracks the 30-day implied volatility of the S&P 500 futures via options prices. — Li

Dow Jones Industrial Average futures rallied more than 500 points Friday morning as investors sought to curb some of the steepest losses since March suffered in the prior session. The pop Friday morning put the Dow on track to gain 2.3% at the opening bell, the S&P 500 set to add 2.2% and the Nasdaq-100 to advance 1.9% on the week’s final day of trading. The so-called reopening stocks led the way higher in the premarket, with Carnival Corp., United Airlines, Kohl’s and Gap all outperforming. — Franck

— CNBC’s Jeff Cox, Michael Bloom, Pippa Stevens, Gina Francolla, Kevin Stankiewicz and Maggie Fitzgerald contributed reporting.

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