Dow surges nearly 800 points and aims for best day in over a year as Nasdaq, S&P 500 erase weekly losses and angst over Russia-Ukraine clash gives way to buying

How are stock indexes trading

• The Dow Jones Industrial Average
  DJIA,
  +2.18%
  gained 786 points, or 2.4%, to trade at 34,010, which puts blue chips on track for the best daily gain since early November of 2020.

• The S&P 500
  SPX,
  +1.75%
  traded 90 points, or 2.1%, higher at about 4,378.

• The Nasdaq Composite Index
  COMP,
  +0.82%
  traded 190 points, or 1.4%, to 13,665.

• For the week, the Dow was on track for a 0.2% decline, while the S&P 500 was looking at a 0.7% weekly advance, and the Nasdaq Composite was on track for a 0.9% climb, as the benchmarks wiped out losses from earlier in the week.

For more: Complete MarketWatch coverage of the Russian invasion of Ukraine

On Thursday, the Dow snapped a five-session losing streak, closing up 92.07 points, or 0.3%, at 33,223.83, after falling as far as 2.6% in morning trading. The S&P 500 climbed 63.2 points, or 1.5%, finishing at 4,288.70, but in correction territory, while the Nasdaq Composite rose 436.1 points, or 3.3%, ending at 13,473.59, but bouncing off a session low at 12,587.88.

What’s driving the market

What a difference two days can make as stocks gained altitude on the back of news reports, citing a summary of a call between Russian President Vladimir Putin and Chinese leader Xi Jinping provided by China’s Foreign Ministry, which said Russia was ready to conduct negotiations with Ukraine.

The reports come as Russian forces were closing in on Ukrainian capital Kyiv, which had been under fire earlier Friday.

On Thursday, President Joe Biden announced a new wave of sanctions against Russia, in an attempt to isolate Moscow from the global economy. The White House also authorized more U.S. troops to be stationed in Germany. But the U.S. and its allies spared Russia’s oil exports and avoided blocking access to the Swift global payment network.

“The latest Western sanctions on Russia will hit its economy hard through tighter financial conditions and reduced trade, and might plausibly hit GDP by 1-2%-pts,” William Jackson, Chief Emerging Markets Economist, at Capital Economics wrote in note. “But sanctions stopped short of the more damaging scenario — both for Russia and Europe — in which Russia’s energy exports are targeted. For most countries, the main economic impact of the crisis will come through higher commodity prices and the impact on inflation.”

See: Ketanji Brown Jackson, Biden’s Supreme Court pick, once sided with Trump on his border wall

Investors might be hoping that the Ukrainian crisis could slow moves by central banks to raise interest rates to combat inflation, said Ipek Ozkardeskaya of Swissquote Bank SA, in a note. But “the only certainty is uncertainty, and this is how it will be for the next couple of sessions unfortunately,” he said.

Crude prices came off Thursday’s highs after rising above $100 a barrel during intraday trading for the first time since 2014.

Need to Know: Why the energy shock from Russia’s invasion of Ukraine won’t wreck the stock market

In U.S. economic data on Friday, the Federal Reserve’s favorite inflation calculator rose by 0.6% in January and showed the biggest yearly increase since 1982, underscoring why the central bank is poised to raise interest rates for the first time in four years.

Meanwhile, orders for durable goods rose 1.6% in January, the government said Friday. Economists had forecast a 0.8% rise in orders for durable goods — products made to last at least three years.

In other economic reports, a final reading of U.S. consumer sentiment for February from the University of Michigan rose slightly to 62.8. The index registered 61.7 earlier in the month after a preliminary survey, marking the lowest level in more than 10 years.

Also, U.S. pending home sales fell a sharp 5.7% in January, according to a monthly index released by the National Association of Realtors on Friday. Economists polled by The Wall Street Journal expected pending home sales to rise 1%. 

Which companies are in focus?

• Shares of Tesla Inc.
  TSLA,
  -0.41%
  were in focus Friday after Daiwa Capital analyst Jairam Nathan said it is finally time to start buying again, as supply chain concerns and rising oil prices weigh on legacy auto makers. Its stock was down 1.3%.

• Johnson & Johnson
  JNJ,
  +5.12%
  and three major distributors completed nationwide settlements over their role in the opioid addiction crisis Friday. The drugmakers stock rose over 3%.

How are other assets faring?

• The 10-year benchmark Treasury note yield BX:TMUBMUSD10Y stood at 1.98%, up from 1.969% at 3 p.m. Eastern Time rate on Thursday.

• The U.S. dollar was down 0.4%, as gauged by the ICE U.S. Dollar Index DXY.

• Oil prices traded lower, with benchmark U.S. crude CLJ22 flat to slightly higher at $92.82 a barrel, retreating from $100.

• Gold GC00 traded down 1.8% to $1,892.80 an ounce, giving up all of its gains from Thursday and then some and pointing to weekly losses.

• The Stoxx Europe 600 SXXP closed 3.3% higher, but put in a 1.6% weekly decline, while London’s FTSE 100 UKX surged 3.9%, bringing its weekly loss to 0.3%.

• In Asia, the Hang Seng HSI in Hong Kong declined by 0.6% and finished 6.4% lower for the week and China’s Shanghai Composite Index SHCOMP rose 0.6% on the day but notched a 1.1% weekly decline. Japan’s Nikkei 225 Index
  NIK,
  +1.95%
  was up nearly 2% on Friday.