Wall Street on Friday completed a four-session win streak, setting fresh records after another batch of strong earnings, which helped investors put Monday’s sudden sell-off in the rear view mirror.

Cautious optimism in the face of rising coronavirus cases nudged major benchmarks higher in a slow but steady rally, culminating in a weekly gain and new record highs. Stocks managed to stretch an improbable win streak into 4 days as traders struggled to decipher the meaning behind a surprise rise in unemployment, and worrisome COVID-19 numbers.

The head-spinning reversal from Monday’s drubbing was part of the market’s attempt to calibrate a resurgence of COVID-19 cases against a red-hot economic expansion that continues to gain momentum. Even amid the turmoil and uncertainty, the major benchmarks are within striking distance of record highs set just over a week ago.

“What I would say is looking both bottom up and top down, the way the market’s priced currently is very much in the early stages of recovery,” Deutsche Bank chief global strategist Binky Chadha told Yahoo Finance Live on Friday.

Sentiment took a hit after data Thursday showed an unexpected jump in jobless claims, which last week set a fresh pandemic-era low. New unemployment filings jumped to 419,000 in the latest week, well above consensus estimates of 360,000.

Since the onset of COVID-19, the data series has served as an avatar of the labor market’s health, and could take on new importance if rising infections start to trigger new restrictions — which may lead to another round of job losses.

“As with the recent resurgence in COVID cases stemming from the Delta variant, the jump in jobless claims is a disappointment. Recovery is never a perfect straight line,” noted Mark Hamrick, a senior economic Analyst at Bankrate.

On Friday, investors digested services and manufacturing data that underscored the economy’s strength, but revealed the sector grew at a more moderate pace than expected. Markit’s preliminary U.S. Manufacturing PMI for July checked in at a lower-than-expected 59.7 versus 63.7 in the prior month. A reading abover 50 denotes growth.

Strong earnings have helped the market heal from Monday’s pandemic-inspired meltdown, with investors looking at the fundamentals rather than surging coronavirus numbers.

This week, industry bellwethers Netflix (NFLX), Chipotle (CMG), Coca-Cola (KO), Johnson & Johnson (JNJ) and Verizon (VZ) topped market expectations, boosting a market that’s seen precious little downside in recent months. 

On Thursday, Intel (INTC) Twitter (TWTR), Snap (SNAP) — the parent company of Snapchat, Southwest (LUV) and AT&T (T) joined the brigade of better-than-expected earnings results, with both companies bolstered by surging post-lockdown demand.

Monday’s selloff momentarily took the spotlight from quarterly earnings that have almost uniformly reflected a strong rebound. The rising case count driven by the Delta variant — a more communicable form of COVID-19 — pushed the Dow (^DJI), Nasdaq (^IXIC) and S&P 500 (^GSPC) to their biggest drop in months.

However, the signals emanating from the bond market are decidedly less enthusiastic. Analysts have pointed out that safe-haven Treasury bond yields have been the biggest beneficiary of COVID-19 fears, after having soared in recent weeks on inflation fears. 

It suggests that investors could be parking cash in bonds because jitters over inflation or waning, or they sense weakness on the horizon — which may or may not be driven by the stubborn persistence of COVID-19.

“This move in the 10-year [Treasury yield] is significant,” Bank of America’s chief U.S. economist Michelle Meyer told Yahoo Finance Live on Thursday. “Market participants are saying that there potentially is a speed bump in this recovery, that the risks to the downside have grown.”

4:01 p.m. ET: Stocks close out choppy week on a high note

Here’s where major benchmarks ended the session:

  • S&P 500 (^GSPC): 4,411.78, +44.30 (+1.01%)

  • Dow (^DJI): 35,061.55, +238.20 (+0.68%)

  • Nasdaq (^IXIC): 14,836.99, +152.39 (+1.04%)

  • Crude (CL=F): $72.03 per barrel, +0.12 (+0.17%)

  • Gold (GC=F): $1,801.60 per ounce, -3.80(-0.21%)

  • 10-year Treasury (^TNX): +0.21 bp yielding 1.2860%

12:15 p.m. ET: Stocks hold gains, S&P notches marginal new record

Here’s where prices stood at midday ET:

  • S&P 500 (^GSPC): 4,404.09, +36.61 (+0.84%)

  • Dow (^DJI): 35,028.45, +205.10 (+0.59%)

  • Nasdaq (^IXIC): 14,801.86, +117.27 (+0.80%)

10:00 a.m. ET: Data: Manufacturing, services feel overhang of supply squeeze

U.S. business activity grew at a moderate pace for a second straight month in July amid supply constraints, suggesting a cooling in economic activity after what was expected to have been a robust second quarter. IHS Markit’s flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to a four-month low of 59.7 from 63.7 in June. 

9:50 a.m. ET: China stocks hammered amid government crackdown

A man looks at the Pudong financial district of Shanghai November 20, 2013. With a shift in tone and language, China's central bank governor has dangled the prospect of speeding up currency reform and giving markets more room to set the yuan's exchange rate as he underlines broader plans for sweeping economic change. The central bank under Zhou Xiaochuan has consistently flagged its intention to liberalise financial markets and allow the yuan to trade more freely, even before the Communist Party's top brass unveiled late last week the boldest set of economic and social reforms in nearly three decades. REUTERS/Carlos Barria (CHINA - Tags: BUSINESS CITYSCAPE TPX IMAGES OF THE DAY)A man looks at the Pudong financial district of Shanghai November 20, 2013. With a shift in tone and language, China's central bank governor has dangled the prospect of speeding up currency reform and giving markets more room to set the yuan's exchange rate as he underlines broader plans for sweeping economic change. The central bank under Zhou Xiaochuan has consistently flagged its intention to liberalise financial markets and allow the yuan to trade more freely, even before the Communist Party's top brass unveiled late last week the boldest set of economic and social reforms in nearly three decades. REUTERS/Carlos Barria (CHINA - Tags: BUSINESS CITYSCAPE TPX IMAGES OF THE DAY)

A man looks at the Pudong financial district of Shanghai November 20, 2013. With a shift in tone and language, China’s central bank governor has dangled the prospect of speeding up currency reform and giving markets more room to set the yuan’s exchange rate as he underlines broader plans for sweeping economic change. The central bank under Zhou Xiaochuan has consistently flagged its intention to liberalise financial markets and allow the yuan to trade more freely, even before the Communist Party’s top brass unveiled late last week the boldest set of economic and social reforms in nearly three decades. REUTERS/Carlos Barria (CHINA – Tags: BUSINESS CITYSCAPE TPX IMAGES OF THE DAY)

Investors are taking the wood to Chinese stocks, in the wake of Beijing’s move to exert more control over listed companies. There’s been increased scrutiny on the sector ever since the Chinese government brought the hammer down on Didi, which is facing the threat of increased penalties. The stock is tanking in early trading, down over 17% on the day and more than 50% below its 52-week high.

9:30 a.m. ET: Stocks pop at the opening bell

Here’s where markets stood as of 9:30 a.m.:

  • S&P 500 (^GSPC): 4,387.10, +19.62 (+0.45%)

  • Dow (^DJI): 35,038.02+214.67(+0.62%)

  • Nasdaq (^IXIC): 14,699.16, +14.56 (+0.10%)

  • Crude (CL=F): $71.82, -0.09 (-0.13%)

  • Gold (GC=F): $1,802.10 per ounce, -$3.30(-0.18%)

  • 10-year Treasury (^TNX): +4.1 bps to yield 1.312%

7:15 a.m. ET Friday: Stock futures stay in the green

Here were the main moves in markets as of 7:15 Eastern:

  • Dow futures (YM=F): 34,873.00, +164.00, (+0.47%)

  • Nasdaq futures (NQ=F): 15,001.75,+73.25 (+0.49%)

  • S&P 500 futures (ES=F): 4,380.75, +21.25 (+0.49%)

7:21 p.m. ET Thursday evening: Stock futures gain

Here were the main moves in markets as of 7:21 p.m. ET:

  • Dow futures (YM=F): 34,765, +56

  • Nasdaq futures (NQ=F): 14,975, +47.75

  • S&P 500 futures (ES=F): 4,370, +10.25

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Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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