By Anna Hirtenstein
Stocks edged up Friday ahead of fresh data on the services and manufacturing sectors that are expected to point to a robust economic recovery.
The S&P 500 ticked up 0.3%. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq Composite gained 0.4%.
Stocks have come under pressure in recent days as concerns about the pace of economic recovery, high valuations for technology stocks and rising bond yields weighed on sentiment. On Friday, investors will get to assess purchasing managers' views on the outlook for both the services and manufacturing sectors at 9:45 a.m. ET.
"Investors are taking a little bit of a pause," said Arthur van Slooten, global asset allocation strategist at Société Générale. "We believe there is further to go. When the reflation trade is back on and there is more confidence about this, we'll see a continuation of the market performance that we've had" in recent weeks, he added.
In bond markets, the yield on the 10-year Treasury note rose to 1.308%, from 1.286% on Thursday. Yields have climbed this week, prompting some investors to question whether risky assets such as stocks are looking less attractive, said Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.
"A main driver for equity markets over the past few months has been a lack of competition," Mr. Ganesh said. "If yields rise, then we could see some people rotating away from growth names and toward credit or bonds."
Ahead of the market open, Uber dropped close to 2% after the car-hailing service lost a court case in the U.K.'s Supreme Court. The judge ruled that a group of drivers should have employee status, delivering a blow to the gig-economy business model. Agricultural equipment maker Deere jumped over 6% after saying it expects solid profit growth in 2021.
Oil prices pulled back after U.S. diplomats said Thursday evening that they may meet with Iran officials for nuclear talks in the coming weeks, prompting speculation that a deal could allow Iran to begin exporting more crude. Brent crude declined 1.5% to $62.99 a barrel and the U.S. benchmark, West Texas Intermediate, fell 1.9% to $59.36.
Investors are closely watching "how quickly Iran could re-enter the market," said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB. The country is expected to add between 2 and 3 million barrels a day to global production if sanctions are lifted, he said.
Overseas, the pan-continental Stoxx Europe 600 climbed 0.5%.
Among European equities, Hermès International climbed almost 5% after the luxury-goods company said its revenue grew in the second half of the year and it announced a dividend. Car maker Renault dropped over 6% after it posted a full-year loss and scrapped a dividend.
In Asia, major stock benchmarks were mixed by the end of trading. The Shanghai Composite Index closed up 0.6%, while Japan's Nikkei 225 retreated 0.7%.
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(END) Dow Jones Newswires
February 19, 2021 09:48 ET (14:48 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.