Stocks climb to new records. S&P 500 closes above 3,000

The major U.S. stock indexes closed at record highs Friday, with the Standard & Poor’s 500 index ending above 3,000 points for the first time. The market was driven higher by technology, consumer discretionary and industrial company stocks, which more than offset drugmakers’ decline.

Investors continued to remain focused on the Federal Reserve. To help counter slowing economic growth caused by various trade disputes, the Fed is expected to cut its benchmark interest rate this month for the first time in more than a decade. Investors have bet heavily that the Fed is moving in that direction, pushing stocks and bond yields higher in the last two weeks.

The Dow climbed 243.95 points, or 0.9%, to 27,332.03 on Friday. The S&P 500 rose 13.86 points, or 0.5%, to 3,013.77, and the Nasdaq composite index rose 48.10 points, or 0.6%, to 8,244.14. All three indexes closed at record highs.

Healthcare stocks took some of the heaviest losses. Eli Lilly, Merck and Pfizer each fell more than 1%. Pharmaceutical companies also fell Thursday after the Trump administration withdrew a plan to overhaul the rebates that drugmakers pay to insurers and distributors. Investors now expect drugmakers may come under renewed pressure to lower prices.

Johnson & Johnson slid 4.1% after Bloomberg News reported that the drugmaker, a Dow component, is under a criminal investigation for possibly lying to the public about the potential cancer risks found in its popular baby powder.

Industrial companies did well. DuPont rose 2.9%, Emerson Electric gained 2.4%, and Illinois Tool Works climbed 3.1%. There was positive economic data out of Europe on Friday: Industrial production rose 0.9% in May, much more than the 0.2% gain that economists had expected.

Ford rose 2.9% after announcing that it would team up with Volkswagen to share costs on self-driving and electric vehicles.

Illumina, a genetics toolmaking company, plunged 16.1% after the company announced that it was lowering its full-year forecast.

Anheuser-Busch InBev slid 3% after the Wall Street Journal reported that the beer giant was canceling plans to spin off its Asian division into a separate publicly traded company.

Bond yields have been rising for several days, a sign that investors have become more confident that the U.S. economy will continue to produce growth, at least for the next several months. On Wednesday, Fed chief Jerome Powell told Congress that many central bank officials believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut.

The yield on the benchmark U.S. 10-year Treasury note was 2.12%, up from the multiyear low of 1.95% it hit only 10 days earlier.

“In our view, the Fed will cut [rates by a quarter of percentage point] since market expectations are near 90%,” Tom Di Galoma, with Seaport Global, wrote in a note to clients.

Investors are preparing for the start of second-quarter earnings season. Major U.S. banks will begin reporting their results Monday, starting with Citigroup. JPMorgan Chase, Wells Fargo and Goldman Sachs will report their results on Tuesday.

Benchmark crude oil rose 1 cent, to settle at $60.21 a barrel in New York. Brent crude oil, the international standard, rose 20 cents, to $66.72 a barrel.

Wholesale gasoline fell 1 cent, to $1.98 a gallon. Heating oil was flat at $1.98 a gallon. Natural gas rose 3 cents, to $2.45 per 1,000 cubic feet.

Gold rose $5.60, to $1,409.90 an ounce; silver rose 9 cents, to $15.16 an ounce; and copper rose 1 cent, to $2.69 a pound.

The dollar rose to 107.81 Japanese yen from 108.47 yen on Thursday. The euro strengthened to $1.1271 from $1.1258.