By Avinash P and Purvi Agarwal
Aug 21 (Reuters) - The main U.S. stock indexes recovered on Friday after a hammering in the previous session, though markets were still on track to end the week in the red as rising government bond yields and geopolitical tensions weakened risk sentiment.
The S&P 500 and the tech-heavy Nasdaq were set to snap a three-week winning streak, while the Dow was headed for a second consecutive weekly loss and its steepest weekly decline since mid-March.
On Friday, healthcare
and financials were the biggest boosts to the S&P 500 and were up 1.6% and 1%, respectively.
Retail-investor platform Robinhood advanced nearly 13%. Crypto exchange operator Coinbase Global added 9.8% and bitcoin-hoarder Strategy rose 7.2% as bitcoin touched its highest mark since late May.
Megacap stocks were mixed as Alphabet and Microsoft gained about 1% each, while Nvidia and Amazon.com dropped 0.3% each.
Tech stocks are set to underperform peers this week, pummeled by a surge in longer-dated Treasury yields. Concerns over ballooning government debt, higher financing costs and persistent inflation fears had pushed up 30-year Treasury bond yields to a 19-year high on Tuesday.
"If you see a durable move lower in the long end of the curve, that will be a tailwind for some of the more growth-oriented areas of the market, of which that AI trade would certainly be front and center," said Jeff Schulze, head investment strategist at the Franklin Templeton Institute.
U.S. Treasury Secretary Scott Bessent's announcement on Thursday that the government could further increase its Treasury repurchases after Wednesday's surprise intervention provided short-lived respite.
"If yields can stay in the 4.7% to 4.75% range, the markets will look through this and start to trade higher," Schulze said.
At 11:47 a.m. ET, the Dow Jones Industrial Average rose 471.32 points, or 0.89%, to 53,231.61, the S&P 500 was up 50.26 points, or 0.66%, to 7,691.42, and the Nasdaq Composite gained 168.68 points, or 0.65%, to 26,235.84.
Ross Stores added 4.8% after the value retailer raised its annual profit forecasts and reported better-than-expected second-quarter results.
However, Bessent said the United States will impose "the toughest sanctions in history" on Iran, a move he suggested would lessen the need for new major military operations, keeping risk appetite in check.
The impasse between Washington and Tehran meant oil prices were higher for a sixth straight day. [O/R]
UBS Global Wealth Management raised its year-end target for the S&P 500 to 8,100, citing a stronger earnings outlook and robust corporate profit growth.
A flash estimate of the S&P Global purchasing managers' index survey stood at 53.2 for August, compared with an expectation of 53.9, according to economists polled by Reuters.
EYES ON WARSH, AI BELLWETHER NVIDIA
Attention will now turn to next week's personal consumption expenditures data, the U.S. Federal Reserve's preferred inflation gauge, following tame inflation readings last week that knocked down bets of an imminent central bank rate hike.
Fed Chair Kevin Warsh's speech at the Jackson Hole symposium will also be watched, while Nvidia is scheduled to report quarterly earnings next week, in the next test of the AI trade. Advancing issues outnumbered decliners by a 1.79-to-1 ratio on the NYSE and by a 1.89-to-1 ratio on the Nasdaq.
The S&P 500 posted eight new 52-week highs and two new lows, while the Nasdaq Composite recorded 64 new highs and 53 new lows.
(Reporting by Avinash P and Purvi Agarwal in Bengaluru; Editing by Pooja Desai)
