Stocks climb, approaching record highs again
Stocks are rising Friday, the latest nudge forward for a market that has taken a slow and steady path to record highs. Telecom and utility stocks led the way, as they have for much of this year.
The Standard & Poor’s 500 index was up 8 points, or 0.4%, to 2,173 at 2:22 p.m. Eastern time. The Dow Jones industrial average rose 28, or 0.2%, to 18,545. The Nasdaq composite advanced 28, or 0.6%, to 5,102.
The S&P 500 recovered most of its 0.4% loss from a day earlier.
ANALYST’S TAKE: “I think people are a little more sensitized, where any tick lower in the market creates this ‘buy on the dip’ mentality,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. “I think it’s interesting; a half-a-percent move down feels like a 5% move.”
ANOTHER MILD ONE: It’s been a calm drive the last two weeks for the S&P 500, where mostly modest moves have helped set a series of records culminating in its all-time high of 2,173.02, set Wednesday. The index has yet to have a day where it moved by 1%, up or down, in the last two weeks.
Many doubts are still hanging over the market, including the continued drop for corporate earnings and a U.S. economy that is growing only modestly. Various earnings and economic reports have come in better than expected, however, and the S&P 500 is up more than 8% since June 27.
It’s a sharp turnaround from the end of June, when worries about Britain’s vote to leave the European Union sent the S&P 500 to six straight days where it swung at least 1%.
WINNING STREAK: The S&P 500 is on track for a modest gain for the week, maybe half a percent. If it holds, it will be the fourth consecutive up week for the index, its longest winning streak since March.
BIGGER WAVES AHEAD? Next week could be more exciting for markets, with the Bank of Japan and Federal Reserve each holding policy meetings. Record-low interest rates and big stimulus programs from central banks have pushed stocks higher since the financial crisis.
Japan’s economy is barely growing, and economists are speculating about whether its central bank may push more stimulus next week.
The U.S. economy is in better shape than other advanced economies, and few expect the Federal Reserve to make a big move at its meeting. But if the Fed highlights the better-than-expected recent economic reports, economists may move up their predictions for when the it could next raise interest rates.
The Fed pulled rates off their record low in December but has held pat since then.
ENERGIZED: Southwestern Energy jumped $1.22, or 9.2%, to $14.43. The producer of natural gas and oil it reported higher-than-expected earnings and raised its forecast for production this year. Southwestern Energy was the best-performing stock in the S&P 500.
POWERED UP: Stanley Black & Decker jumped $5.78, or 5%, to $120.75 after reporting stronger revenue and earnings for its last quarter than Wall Street expected. It benefited from stronger tool sales in Europe and elsewhere.
ALIGHTING: American Airlines climbed $1.30, or 3.7%, to $36.26 after reporting a milder drop in quarterly earnings than analysts expected. The carrier’s revenue fell 4% because of the soft global economy, among other factors; Wall Street had forecast a steeper drop.
NOT SO SWEET: Honeywell International fell $2.99, or 2.5%, to $115.67 to lead industrial stocks lower. The company reported stronger earnings than analysts expected, but it also lowered its forecast for full-year sales. The industrial sector was the only one of the 10 that make up the S&P 500 to fall.
OUCH: Stryker fell $5.90, or 4.8%, to $116.65 after it gave a forecast for earnings in the current quarter that was lower than analysts were expecting. Before the report, the medical device maker’s stock had been up more than 30% for the year.
OVERSEAS: European markets were mixed after reports suggested countries that use the euro are proving resilient to the uncertainty surrounding Britain’s vote. A report on business in Britain was “truly horrible,” according to one economist, and raised expectations of more central bank stimulus there.
Germany’s DAX index slipped 0.1%, France’s CAC 40 index edged up 0.1% and Britain’s FTSE 100 rose 0.5%. Japan’s Nikkei 225 index fell 1.1%, Hong Kong’s Hang Seng slid 0.2% and South Korea’s Kospi index lost 0.1%.
BONDS: The yield on the 10-year Treasury note fell to 1.55% from 1.56% late Thursday, reversing course from gains earlier in the day. The yield on the 30-year Treasury bond fell to 2.28% from 2.29%.
COMMODITIES: The price of U.S. crude fell 52 cents, or 1.2%, to $44.23 a barrel. Brent crude, the global benchmark, fell 55 cents, or 1.2%, to $45.65 a barrel in London. Gold fell $8.40, or 0.6%, to $1,322.60 per ounce.
CURRENCIES: The pound sank against the dollar on expectations for more stimulus from the Bank of England. It fell to $1.3094 from $1.3203. The dollar ticked up to 106.11 Japanese yen from 105.86 yen, and the euro slipped to $1.0957 from $1.1013.
METALS: Precious and industrial metals prices ended lower. Gold fell $7.60 to $1,323.40 an ounce, silver fell 13 cents to $19.69 an ounce and copper fell 2 cents to close at $2.24 a pound.
