Stocks Rally, Notch 3% Gains for the Week
- Major U.S. stock indexes powered to another day of fresh record highs on Friday, with the S&P 500 ending the week up 3 percent, as investors bid up shares in sectors that have lagged in the month-long rally since Donald Trump's presidential election.
The benchmark S&P 500 registered a record high for the third straight session, while the Dow and Nasdaq also hit new highs. The Dow recorded a fifth straight week of gains.
Trump's expected agenda of economic stimulus and reduced taxes and regulations has particularly fueled financial and industrial shares. On Friday, sectors that have underperformed - healthcare, consumer staples, utilities and tech - led the way.
"You have this post-election exuberance that has been infecting every area of the market," said Peter Costa, president of trading firm Empire Executions. "There was a rotation out of tech stocks early on because the industrials were in favor. Now the tech stocks are getting some legs under them as well."
The Dow Jones industrial average rose 142.04 points, or 0.72 percent, to 19,756.85, the S&P 500 gained 13.34 points, or 0.59 percent, to 2,259.53 and the Nasdaq Composite added 27.14 points, or 0.5 percent, to 5,444.50.
The S&P 500 notched its sixth straight day of gains, leaving it up 10.5 percent for the year.
Stocks picked up steam in afternoon trading and ended near session highs.
"Everybody is looking for the momentum to fall apart or to at least result in a correction, and we don't seem to get it," said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York. "By the end of the day, cash is burning a hole in portfolio managers' pockets and is getting reallocated out of fixed income and into equities."
The S&P consumer staples sector rose 1.4 percent, bolstered by Coca-Cola's 2.5-percent gain. The company said Muhtar Kent would step down as chief executive and named company veteran James Quincey as his successor.
Healthcare gained 1.2 percent, helped by Bristol-Myers Squibb's 3.3-percent rise after the drugmaker raised its dividend.
"Today we're seeing money going into some of the lesser loved sectors since the election, which is telling me the rally is broadening, which is a very positive sign," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
As the market has climbed, investors have also pointed to a recent run of encouraging economic data supporting equities.
On Friday, a preliminary survey from the University of Michigan showed the U.S. consumer sentiment index at its highest since January 2015. U.S. wholesale inventories fell in October amid a surge in sales, supporting views that inventory investment would help economic growth in the fourth quarter.
The rally will be tested by next week's Federal Reserve meeting. The U.S. central bank is widely expected to raise benchmark interest rates, with market participants looking for clues about the pace of future hikes.
"The tone of the Fed is going to be key to the sustainability of this rally," Ghriskey said.
About 7.4 billion shares changed hands in U.S. exchanges, compared with the 7.5 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored advancers.
The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 375 new highs and 17 new lows. (Additional reporting by Sinead Carew in New York and Yashaswini Swamynathan in Bengaluru; Editing by Nick Zieminski and James Dalgleish)