OK, we can all relax now, right?
Stocks were able to break their three-day losing streak on Friday, with a bounce that was no doubt helped by less volatility in oil prices.
Although crude finished up 0.8% to nearly $98 a barrel, it’s the underlying moderation in prices over the last two days that has allowed equities to climb about 2% from their intraday lows on Thursday.
The Dow Jones Industrial Average gained 62 points to 12,130, while the S&P 500 14 points to 1320.
A sigh of relief also came from the International Monetary Fund, which said Friday that it expected the move higher in oil prices in the past month was the result of temporary supply concerns that wouldn’t have any lasting economic impact.
Despite less volatility in crude oil prices, however, oil-related stocks had a strong showing. Stocks like Valero Energy (NYSE:VLO) gained 6.6%, while Tesoro (NYSE:TSO) was up 5%.
The hotel sector also fared well, as investors possibly entertained the idea that $5 gas wasn’t happening this weekend and people would still travel as winter winds down. Starwood Hotels (NYSE:HOT) finished up 2.5%.
Even with all the focus on oil, we continue to come back to tech and small-caps, both of which outperformed the market for the second straight day and are a decent reminder that at the end of the week, the S&P 500 is still within 2% of its closing high for 2011. The Nasdaq rose 1.6% to 2781.
In other words, let’s not dismiss the buy-the-dip strategy quite yet with regard to stocks — it may still have some life left.
Semiconductors were again strong on Friday. The Semiconductor Holdrs (NYSE:SMH) exchange-traded fund did it all it can to make up its week’s losses, rising 2.2% on Friday to $36.02. Intel (NASDAQ:INTC) rose 2.7% to $21.86, and is just within 25 cents of its close last Friday.
Not that uncertainty isn’t still casting a shadow — the 10-year Treasury note’s yield fell to 3.42%, dead in the middle of a range in which it was very happy from mid-December to the beginning of this month.
And, of course, we continue to have turmoil in Libya, and to what degree things will have changed by the time markets re-open on Monday. Throw into that mix hundreds of more earnings reports, and a slew of economic data leading up the February jobs report on Friday, and the possibility of a sideways market next week looks extremely remote.
