The stock market closed with solid gains Friday, marking a decisive end to a four-week losing streak for the Nasdaq composite and S&P 500. The Dow today topped 26,000 for a time.
XThe Nasdaq led with a 1.7% leap, resulting in a 4% increase for the week. The S&P 500 rose more than 1% and closed above the 50-day moving average. It was the first close above the 50-day line since May 16.
The Dow Jones Industrial Average climbed 1% as well. It also made it back above its 50-day average and for a moment was back above the 26,000 level. The Dow snapped a six-week losing streak, up nearly 5% for the week.
Volume rose on the Nasdaq and fell on the NYSE, according to preliminary readings. Advancing stocks led decliners by nearly a 3-1 ratio on the Nasdaq and by nearly 2-to-1 on the NYSE. The bullish week makes last Monday's low more likely to hold.
Wall Street went shopping for stocks after the May employment report came in well below forecasts, dampening fear of inflation. U.S. payrolls rose by 75,000, while economists had expected 180,000. But the slowdown in hiring fed fears about the U.S. economy, and odds jumped for an interest-rate cut.
Investors applauded the outlook for cheaper borrowing costs, even if it was a bad sign for the economy. The market's bounce began Tuesday, when Fed Chairman Jerome Powell hinted at a rate cut.
Most S&P sectors rose, with technology leading the way. The Technology Select Sector SPDR Fund (XLK) climbed nearly 2% and the Communication Services Select Sector SPDR Fund (XLC) rose 1.6%. Utilities, which outperformed as the market struggled in May, fell 0.8%.
Leading stocks performed in line with the main indexes. The Innovator IBD 50 ETF (FFTY) climbed 1.1% and closed at its own 50-day moving average.
Breakouts among top-rated stocks added to the favorable tone in today's stock market.
Microsoft (MSFT) stock cleared the 131.47 buy point of a flat base in active trading. It closed near the entry. The relative strength line made a new high also. Microsoft regained its status as the only $1 trillion company by market cap.
MongoDB (MDB) surged past the 154.90 buy point of a cup base in heavy trading. Shares closed well past the 5% buy range. MongoDB late Wednesday beat earnings and revenue views but forecast a larger-than-expected loss for the full year. The stock fell the next day but pared most of the loss, and the bullish momentum carried into Friday's trading.
Tractor Supply (TSCO), Automatic Data Processing (ADP), NMI Holdings (NMIH) and other high-rated stocks cleared buy points but their volume was weak.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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