Courtesy Everett Collection
U.S. stocks ended mostly higher Friday, with the Dow posting its longest win streak since late last year. Few economic reports on inflation or the economy were able to deter Wall Street from tentatively buying assets perceived as risky. Although comments by President Donald Trump proposing sweep changes to health-care policy briefly pushed the main benchmarks to intraday losses before rebounding.
What are markets doing?
The Dow Jones Industrial Average rose 91.64 points, or 0.4%, to 24,831.17, marking its seventh straight positive session — its longest winning streak since a similar stretch that ended Nov. 8, 2017.
The S&P 500 rose 4.65 points, or 0.2%, to 2,727.72, with gains in health-care stocks, up 1.5%, and telecommunications, rising by 2.1%, producing the best returns of the broad-market benchmark’s 11 sectors.
The Nasdaq Composite Index meanwhile, lagged behind its peers, finishing at break-even levels for the session, down 2.09 points, or off less than 0.1%, at 7,402.88, and ending its multiday run-up of five consecutive advances, that representing its best string of victories since February.
Overall, stocks booked solid gains as buyers felt supported by solid corporate earnings, and a retrenchment of government bond rates and the dollar, both factors that can prompt investors to sell stocks amid pressure from a rapidly rising rates and a strengthening currency, which can be a headwind for countries doing business abroad, making products and services relative more costly to foreign buyers using weaker monetary units.
For the week, the Dow rose 2.3%, the S&P 500 advanced 2.4% and the Nasdaq climbed 2.7%.
What is driving the markets?
Cooler U.S. consumer prices helped propel stocks Thursday, while lower bond yields and a weak dollar also lent a hand. Meanwhile, Wall Street’s so-called “fear gauge” has been falling for the past five sessions, tapping its lowest level since late January.
On Friday, the import price index rose 0.3% in April because of the higher cost of oil. This was softer than the 0.5% gain expected by economists surveyed by Econoday. Excluding fuel, import prices rose 0.2% last month. The initial University of Michigan consumer sentiment index was unchanged at 98.8 in May.
St. Louis Fed President James Bullard said that after being dislocated over the past decade, suppliers of labor, or households, are now on the same footing as employers. He also said the U.S. wasn’t in any danger of a breakout of inflation, but that he was worried the yield curve could invert as soon as September. Inverted yield curves, or the gap between the 2-year and 10-year Treasury notes, often precede recessions.
What are strategists saying?
“We’ve been in a broad trading range, but we’ve broken out of the downtrend that we had been seeing, thanks to some strong earnings and bond yields that have remained stable below 3%. This has put us back into a neutral positive for the year,” said Donald Selkin, chief market strategist at Newbridge Securities.
“Recent data on consumer prices and producer prices have also supported the market, as they’ve cooled investors on the idea that we might be seeing runaway inflation.”
“I think this is just a continuation of the week where we’re getting strong, reasonable economic growth with very little inflation; so, anything that keeps the 10-year Treasury [yield] below 3% is good news for stocks,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors.
A 10-year Treasury yield clambering above 3%, rattled equity investors late last month, but 10-year yield finished Friday’s session, according to 3 p.m. Eastern Time levels, little changed at 2.9713%, according to WSJ Market Data Group.
What stocks are in focus?
The Trade Desk Inc. jumped 43.4% after the platform for managing digital-ad campaigns blew out earnings forecasts. It reported that streaming TV advertising surged nearly 2,000% over the year in the first quarter.
Shares of Nvidia Corp. fell 2.2% after the chip maker’s shares fell in late trade, even after the company reported results and an outlook that topped Wall Street’s view. The stock was one of the bigger drags on the overall technology space, and it also weighed on other chip makers. Advanced Micro Devices declined by 1.5%.
Drug stocks mostly rose after Trump is made a speech on drug prices Friday afternoon, with
The exchange traded SPDR S&P Biotech ETF a broad gauge of biotechnology names, ending 2.9% higher, the SPDR S&P Pharmaceuticals ETF a popular ETF tracking pharmaceuticals, rose 2.7%, while the Health Care Select Sector SPDR climbed 1.5%. Market participants attributed the gains to Trump’s proposals on managing drug pricing and drug and medical-device manufacturing being less concrete than had been feared by investors in the sector.
What are other markets doing?
Asian markets finished the week mostly higher, except for a 0.3% drop for the Shanghai Composite Index while European stocks finished the session mixed but the Stoxx Europe 600 scored a seventh-straight weekly win.
Oil futures settled mostly lower, with West Texas Intermediate crude settling 0.9% lower at $70.70 a barrel, but still gained 1.4% for the week.
The dollar slipped 0.1% lower to 92.548, ending the week little changed but slightly lower, marking its first weekly drop since mid-April, while gold logged a loss.
–Barbara Kollmeyer contributed to this article