By Avantika Chilkoti, Alexander Osipovich and Joanne Chiu 

U.S. stocks recovered some ground Friday, a day after suffering their worst rout since March, but were still poised for weekly losses.

The Dow Jones Industrial Average was up 321 points, or 1.3%, paring gains of as much as 837 points shortly after the opening bell. The index slid 6.9% on Thursday on concerns about an uptick in coronavirus cases and the pace of the economic recovery.

The S&P 500 climbed 1% Friday, while the Nasdaq Composite rose 0.8%. All three indexes are poised to close the week down at least 2.5%, snapping a three-week winning streak.

Before Thursday's jarring halt, U.S. stocks had rallied in recent weeks to erase most of this year's losses. The tech-heavy Nasdaq even hit new records earlier this week and closed above 10000 for the first time, reflecting the strength of big technology stocks like Apple and Microsoft.

The index is now up 6.6% for the year, while the Dow is off 11% and the S&P 500 is down 6.4%.

The optimism reflected in equities has been at odds with the reams of data signaling that the pace of the global economic recovery following the coronavirus pandemic will likely be slow and uneven, with the threat of a second wave of infections that could dim prospects further.

A key turning point came after Federal Reserve Chairman Jerome Powell warned Wednesday that the economy faced a long road to recovery and that the labor market may face more hurdles.

"The market came to the realization that we had come too far, too fast," said Timothy Skiendzielewski, a portfolio manager for U.S. equities at Aberdeen Standard Investments. "We're still in the very early days of reopening the economy. The employment situation is still very precarious. And there's no playbook for reopening the economy after a multi-month shutdown."

A fear of missing out on the rebound in equities, optimism about the tech sector's prospects, the wall of cheap money unleashed by policy makers so far, and confidence the central banks will take more steps to shield major economies from the pandemic's fallout have prompted the steep ascent in stocks since the end of March.

Some of those factors appeared to be back in play Friday as markets bounced back, investors said.

"We can't discount the fact that there is a lot of money sitting on the sidelines," said Brian O'Reilly, head of market strategy for Mediolanum International Funds. "It's a trading market at the moment -- more than a long-term fundamentals market -- so on any setback like yesterday, you're likely to see people come in and bid the market higher."

Economically sensitive stocks powered Friday's rebound. Financials and real estate were among the best-performing sectors in the S&P 500, both up about 2%. Citigroup shares rallied 6.1%.

Norwegian Cruise Line Holdings, Carnival and American Airlines -- some of the worst-performing stocks this year as tourism ground to a halt -- all rose more than 11%.

Boeing, one of the worst performers in Thursday's rout, gained 7.3%, lifting the Dow. Hertz, whose shares have been on a wild ride this week, gained more than 35% after the bankrupt auto rental company said it wants to sell as much as $1 billion in stock to take advantage of its recent rally.

U.S. consumers have grown more optimistic as states and cities have moved to reopen their economies, according to a closely watched gauge of consumer sentiment released on Friday. The University of Michigan's index reading rose to 78.9 in the two weeks ended June 10, from 72.3 for the previous four weeks.

Treasury Secretary Steven Mnuchin said Thursday that the government is weighing a second round of stimulus payments for Americans. That would help prop up spending and plug household budgets, adding to the $267 billion distributed by the Internal Revenue Service so far this year.

Overseas, the pan-continental Stoxx Europe 600 rose 0.3% on Friday. In Asia, Hong Kong's Hang Seng Index retreated 0.7%, while the Shanghai Composite ended the day largely flat.

The stance of the Fed -- which also signaled its willingness to offer more support to the economy and credit markets -- and its counterparts represented a major support for markets, despite Thursday's selloff, according to Ken Peng, head of Asia investment strategy at Citi Private Bank.

"There's just too much cash sitting around for this to be a deep correction," Mr. Peng said. "The Fed and other major central banks have already made it very clear they're there to buy the bottom basically," he said.

The yield on the 10-year Treasury note ticked up to 0.703%, up from 0.651% on Thursday. Bond yields rise as prices fall.

Oil prices slipped. U.S. crude futures fell 0.5% to $36.16 a barrel, on track for their first weekly decline in the past seven weeks.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com, Alexander Osipovich at alexander.osipovich@dowjones.com and Joanne Chiu at joanne.chiu@wsj.com

(END) Dow Jones Newswires

June 12, 2020 13:04 ET (17:04 GMT)