Record-setting rally pushes on as S&P ends week up 3%

NEW YORK (Reuters) – Major US stock indexes powered to another day of fresh record highs on Friday, with the S&P 500 ending the week up 3%, 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%, to 19,756.85, the S&P 500 gained 13.34 points, or 0.59%, to 2,259.53 and the Nasdaq Composite added 27.14 points, or 0.5%, to 5,444.50.

The S&P 500 notched its sixth straight day of gains, leaving it up 10.5% 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%, bolstered by Coca-Cola’s 2.5% 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%, helped by Bristol-Myers Squibb’s 3.3% 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, the Bank of Israel set its representative rate for the US dollar at NIS 3.8180, for the British pound at NIS 4.8127, for the Canadian dollar at NIS 2.8956, for the Australian dollar at NIS 2.8562, and for the South African rand at NIS 0.2791. The bank set the representative rate for the euro at NIS 4.0521 and for 100 yen at NIS 3.3383.

On Friday, a preliminary survey from the University of Michigan showed the US consumer sentiment index at its highest since January 2015. US 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 this week’s Federal Reserve meeting. The US 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.