In a surprise twist to a terrible week for the markets, the S&P 500 soared on Friday. The index jumped 9.2%, making it the market's best one-day rise since October 2008.
Of course, the market still finished the week significantly lower than it started, thanks in large part to the worst one-day market crash since 1987 on Thursday. The S&P 500 was down about 9% for the full week, recovering some ground from a 16.5% decline for the week as of market close on Thursday.
Along with Friday's market rebound, many sectors saw a boost. Large cap tech stocks rebounded particularly sharply. Four notable companies with sharp gains on Friday were virtual machine software specialist VMware (VMW), hotel booking platform Trivago (TRVG -0.98%), local business review platform Yelp (YELP 0.13%), and social network Twitter (TWTR).
Image source: Getty Images.
Here's a look at these four stocks' gains on Friday.
|
Stock |
Intraday High |
Change by Market Close |
|---|---|---|
|
VMware |
10.5% |
10.3% |
|
Trivago |
10.3% |
9.7% |
|
Yelp |
9.7% |
9.7% |
|
|
9.8% |
9.4% |
Data source: Yahoo! Finance.
A volatile few weeks
Even this week's 16.5% market decline doesn't fully capture the severity of the recent pullback in stocks. Zooming out to Feb. 19, the S&P 500 is still down about 20%. In other words, the longest bull market in history is officially over.
Pessimism in the market has been driven by growing fears of the coronavirus outbreak's impact on the global economy. The market sell-off in the U.S. accelerated when confirmed coronavirus cases began to accelerate, making it clear that concerted action from the government, businesses, and communities would be necessary to mitigate the spread of the virus.
But Friday's sharp rise in the market suggests that some investors may believe stocks have been oversold, more than discounting the potential challenges ahead.
Time to buy?
The buying opportunities in tech are beginning to look particularly attractive, as many tech stocks have seen an outsize decline compared to the overall market. For instance, Twitter, Yelp, Trivago, and VMware are down 24%, 31%, 32%, and 34% respectively since Feb. 19 -- worse than the S&P 500's 20% decline over the same time period.
It's not surprising that tech stocks have been hit harder than the broader market, as they are often more volatile than other sectors. But these declines may have more than baked in the challenges ahead, giving present investors an opportunity to scour the tech sector for stocks that have been oversold.
