Market Snapshot: Dow set to rise for a second day but stocks are headed for back-to-back weekly loss


U.S. stock-index futures were trading slightly higher early Friday, but stocks are likely to book a second straight weekly loss in a volatile stretch for Wall Street, framed by rising bond yields and concerns about the global recovery from the coronavirus pandemic.

How are stock benchmarks performing?

On Thursday, the Dow

closed 199.42 points, or 0.6%, higher at 32,619.48, the S&P 500

rose 20.38 points to end at 3,909.52, a rise of 0.5%, while the Nasdaq Composite

closed at 12,977.68, up 15.79 points for a gain of 0.1%.

What’s driving the market?

Stocks have been mostly struggling for direction in recent weeks and analysts have largely attributed this latest bout of volatility to month-end and quarter-end rebalancing by large pensions funds.

The impetus for that action is the rise in bond yields on expectations that the economy may stage a more potent recovery and suffer higher inflation in the wake of the $1.9 trillion fiscal stimulus package from the Biden administration.

As a bull market in bonds comes into question, big investors who adhere to traditional stocks-to-bonds portfolio diversification theories of 60-40 are feeling compelled to buy more fixed income assets as yields rise.

Wall Street will get a key read of U.S. inflation and the health of the consumer later in the session, with data on personal income and consumer spending due at 8:30 a.m. Eastern.

Early Friday, the yield on the 10-year Treasury note yield
after touching a nadir this week around 1.59%, was at around 1.67%, but still below its level last Friday at 1.729%.

A rise in coronavirus cases that has forestalled the business reopening plans for large parts of Europe also has been credited with creating headwinds for bullish investors.

Taken together those factors have helped create a bumpy rotation out of growth stocks that proved big winners during the pandemic and into those value shares that might perform better in an improving economy.

The S&P 500’s information stock sector is down 0.9% so far in March, while the utility sector

is up nearly 9%, industrials

have gained 7%, and consumer staples

are up 6.5%, making those areas the best performers among the broad-market index’s 11 sectors.

One development that could be worth watching, the Federal Reserve said on Thursday that banks won’t be able to make payouts to shareholders in the form of dividends and buybacks until June 30, as long as the institutions meet regulatory requirements, including pass stress tests. The Fed imposed restrictions on such payments at the onset of the COVID crisis.

Looking ahead, investors will also be watching a report on wholesale inventories at 8:30 a.m. and a reading of consumer sentiment at 10 a.m.

Which companies are in focus?

: Private-jet sales rose as airlines filed for bankruptcy through the pandemic

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