Wall Street tapped the brakes on its record-setting rally this week, as markets worldwide took a pause on Friday. The Dow fell 179 points to 30,996, the S&P 500 fell 11 points to 3,841, and the tech-heavy Nasdaq gained 12 points to 13,543. Disappointing earnings reports from IBM and some other companies gave cover for investors to sell and book profits after big recent gains, per the AP. “The big picture is, it’s still a pretty friendly environment for stocks,” said David Lefkowitz, head of Americas equities at UBS Global Wealth Management. ”The pandemic will wind down, you’ll see a surge in corporate profits this year and the Fed made very clear they’re not going to take the punch bowl away anytime soon."
Markets have been mostly rallying recently on hopes that COVID-19 vaccines will lead to a powerful economic recovery later this year as daily life gets closer to normal. Hopes are also high that Washington will deliver another dose of stimulus for the economy now that the White House and both houses of Congress are under single control of the Democrats. Meanwhile, the economy has been taking hits recently, with reports showing weakness in the job market and falling confidence among shoppers. A big question on Wall Street is how much more it can climb before criticism blares even louder that stock prices have grown too expensive relative to corporate profits.
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