Wall Street closes best week of year as recession fears fade

U.S. stocks closed higher on Friday, ending with their biggest weekly percentage gain of the year, as recession fears eased and investors turned their attention to next week’s Jackson Hole Economic Symposium.

The S&P 500 and Nasdaq indexes posted their seventh straight session of gains, recovering from precipitous losses two weeks ago caused by weak economic data and fears of a recession.

All three New York Stock Exchange indexes posted their biggest weekly percentage gains in months, with the S&P 500 and Nasdaq posting their first weekly gains in five years.

“What we’re seeing in the markets today is a continuation of the rally and an easing of pre-recession fears,” said Greg Bassuk, chief executive of AXS Investments in New York.

“Positive economic data is really what’s fueling this rally, giving investors more confidence that a recession is likely to be avoided and the Fed will begin cutting rates in September,” he added.

This week, a flurry of economic data, including the Labor Department’s consumer price index and a Commerce Department retail sales report, offered reassurance that inflation continues to meander toward the Federal Reserve’s 2% target and that consumer spending is healthy.

Data on Friday showed U.S. single-family home construction fell in July to its lowest level in nearly a year and a half, while the University of Michigan’s preliminary report on consumer confidence in August showed a bigger-than-expected improvement.

Central bank leaders from around the world will speak at the Jackson Hole symposium in Wyoming next week, and Federal Reserve Chair Jerome Powell’s keynote speech on Friday could set expectations for a path to U.S. rate cuts.

According to preliminary data, the S&P 500 added 11.34 points, or 0.20%, to end at 5,554.56, while the technology-heavy Nasdaq gained 37.31 points, or 0.21%, to 17,631.81. The Dow Jones Industrial Average .DJI gained 95.62 points, or 0.24%, to 40,658.68.

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