Stocks close at record highs, led by tech companies
Wall Street ended a week of records by setting a few more Friday.
The benchmark Standard & Poor’s 500 index closed at an all-time high, just two days after the current bull market in U.S. stocks became the longest in history. The Nasdaq composite and the Russell 2000 indexes also ended the day at all-time highs.
Technology companies, the best-performing sector in the market this year, accounted for much of the gains. The price of oil snapped a seven-week losing streak, finishing this week about 5% higher.
The rally capped another solid week for the stock market, which has been riding a wave of strong corporate earnings even amid uncertainty over simmering global trade tensions.
“It appears that the market is really focusing on fundamentals,” said Rob Eschweiler, global investment specialist at J.P. Morgan Private Bank. “We’re at the very tail end of earnings season and there’s no other way to characterize the earnings season other than ‘spectacular.’”
The S&P 500 index rose 17.71 points, or 0.6%, to 2,874.69. It has finished with a weekly gain in seven out of the last eight weeks.
The Dow Jones industrial average rose 133.37 points, or 0.5%, to 25,790.35. The 30-company average is still below the record it set in January.
The Nasdaq climbed 67.52 points, or 0.9%, to 7,945.98, beating the high it set July 25. The Russell 2000 index of smaller-company stocks ticked up 8.62 points, or 0.5%, to 1,725.67. It also notched back-to-back all-time highs earlier this week.
Since entering a correction in early February — a loss of 10% or more from a peak — the S&P 500 has mostly crawled higher, with some bumps along the way, thanks to a still-recovering economy and a boom in corporate profits.
More recently, stocks have been buffeted by concerns about mounting trade tensions this spring and summer, particularly between the United States and China. But investors have increasingly focused on strong corporate earnings growth.
Earnings at S&P 500 companies surged 23% in the first half of this year compared with the same period last year, according to S&P Global Market Intelligence.
The string of all-time highs for the indexes underscore the resilience of the U.S. stock market’s bull run, which began in 2009 and became the longest on record Wednesday.
Stocks were trading higher from the get-go Friday, then climbed further after investors weighed new remarks from Federal Reserve Chairman Jerome Powell.
Speaking at an annual conference of central bankers in Jackson Hole, Wyo., Powell struck a measured tone about the economy and said the Fed plans to stick with a gradual pace of rate hikes.
Powell said the central bank recognizes the need to strike a careful balance between its mandates of maximizing employment and keeping price increases stable. And he said a gradual approach to rate hikes is the best way to navigate between the risks of raising rates too fast and “needlessly shortening the expansion” and moving too slowly and risking an overheated economy.
Powell added that while annual inflation has risen to near the Fed’s 2% target rate, it doesn’t seem likely to accelerate above that point. That suggests Powell doesn’t foresee a need for the Fed to step up its rate hikes. Next month, the Fed is widely expected to resume raising rates.
“The equity markets wanted to hear that slow and steady is the path, and I didn’t hear anything to the contrary,” Eschweiler said.
Investors continued to bid up technology stocks Friday. Video game publisher Activision Blizzard rose 4.1% to $74.09.
Shares in materials-sector companies posted solid gains. Specialty chemicals company Albemarle rose 2.4% to $96.
Software maker Autodesk surged 15.3% to $157.20 after issuing a better-than-expected quarterly report and strong forecasts.
Some retailers fell after reporting disappointing earnings or outlooks.
Gap slumped 8.6% to $29.65 after the clothing chain said sales at its namesake Gap brand stores fell in the second quarter compared with a year earlier. Hibbett Sports plunged 30.2% to $20.53 after the retailer cut its fiscal-year profit and sales forecasts following a weak second quarter.
Benchmark U.S. crude rose 1.3% to settle at $68.72 a barrel in New York. It snapped a seven-week losing streak, finishing this week about 5% higher. Brent crude, used to price international oils, rose 1.5% to $75.82 a barrel. Heating oil rose 1.2% to $2.20 a gallon. Wholesale gasoline rose 0.9% to $2.08 a gallon. Natural gas fell 1.6% to $2.92 per 1,000 cubic feet.
The increase in oil prices helped boost energy stocks. Concho Resources advanced 2.7% to $137.99.
Bond prices rose. The yield on the 10-year Treasury fell to 2.81% from 2.82%.
The dollar fell to 111.20 yen from 111.28 yen. The euro strengthened to $1.1625 from $1.1536.
Gold rose 1.6% to $1,213.30 an ounce. Silver rose 1.7% to $14.79 an ounce. Copper rose 1.7% to $2.72 a pound.
2:20 p.m.: This article was updated with closing prices, context and analyst comment.
1:45 p.m.: This article was updated with the close of markets.
This article was originally published at 12:30 p.m.
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