By Yasin Ebrahim
Investing.com – Wall Street suffered its biggest weekly slump since March despite ending higher on Friday, as investors continue to bet the worst of the pandemic's hit to the economy is over and a second wave of infections is unlikely to lead to another shutdown.
The Dow Jones Industrial Average rose 1.90%, or 477 points, The S&P 500 rose 1.32%, while the Nasdaq Composite rose 1.01%.
Investors swooped in to buy beaten-down stocks tied to the progress of the economy, with financials leading the gains supported by a jump in bank stocks.
JPMorgan (NYSE:JPM) rose 2.8%, Bank of America(NYSE:BAC) was up 3.5%, and Citigroup (NYSE:C) jumped 7.9%.
The renewed optimism over reopening trade - bullish bets on stocks tied to the progress of the reopenings across states - comes as the U.S. downplayed the prospect of resuming lockdown measures in the event of a second wave of infections.
"We can't shut down the economy again. I think we've learned that if you shut down the economy, you're going to create more damage," Treasury Secretary Steven Mnuchin said in an interview on CNBC.
Energy also put up gains, though the sector remained on track to close sharply lower for the week, amid growing doubts over crude demand in the wake of rising coronavirus infections that threaten to slow the pace of the reopenings across states.
Occidental Petroleum (NYSE:OXY) was up 6%, Apache (NYSE:APA) rose 7%, and Marathon Oil (NYSE:MRO) climbed 5%.
In tech, FAANG stocks were mostly higher, with the exception of Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN).
Microsoft (NASDAQ:MSFT), meanwhile, faced criticism for refusing to sell facial recognition technology to police departments.
On the earnings front, investors digested mixed quarterly reports.
Adobe (NASDAQ:ADBE) rose 4.6% a day after reporting second-quarter earnings that topped Wall Street estimates on both the top and bottom lines.
"Adobe delivered strong results, which was led by robust Digital Media ARR which crushed Street expectations despite the uncertain COVID-19 backdrop," Wedbush said as it upped its price target on the stock to $410 from $315.
Lululemon Athletica (NASDAQ:LULU), meanwhile, reported revenue and earnings per share that fell short of estimates, sending its share price down more than 4%.
In other news, Tesla (NASDAQ:TSLA) fell 3.8% after Morgan Stanley downgraded its stock to underweight from equal-weight, citing a slew of risks ahead including the uncertain near-term demand and U.S.-China trade tensions.