Dow hits new closing high ahead of index reshuffle

NEW YORK — Industrials led the Dow to a new closing high on Friday ahead of Monday’s major sector reshuffle, capping a week that largely shrugged off trade worries.

Trading volume spiked to the highest level since Feb. 9 in anticipation of the S&P 500 sector change, when telecoms will be folded into a new sector called communications services, along with heavy-hitting stocks like Facebook, Inc. and Walt Disney Co.

While the Dow closed higher, the S&P 500 and the Nasdaq ended the session in negative territory. The S&P and the Dow posted weekly gains, with the Dow showing its biggest weekly percentage advance in over two months. The Nasdaq lost ground on the week.

“Quadruple witching,” when stock options and futures expire, and the rebalancing of the S&P 500 and the Russell 2000 indexes also contributed to heavier traffic.

“A lot of those changes have been anticipated by the index funds, and they’ve prepared for it,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “But there’s a lot going on.”

Boeing Co., the United States’ biggest exporter to China, boosted trade-sensitive industrials higher. The sector led the Dow’s advance.

Yields on long-dated US Treasuries edged down on Brexit anxieties even with Federal Reserve expected to hike key interest rates this week. Financial stocks headed lower, ending their recent rally. “Any time there is a rate hike you potentially see a flattening of the yield curve, which is not good for financials,” said Mr. Ghriskey.

The Dow Jones Industrial Average rose 86.52 points or 0.32% to 26,743.50; the S&P 500 lost 1.08 points or 0.04% to 2,929.67; and the Nasdaq Composite dropped 41.27 points or 0.51% to 7,986.96.

Telecoms rose one percent on its last trading day as a discrete major S&P sector, and was the index’s biggest percentage gainer.

All of the FAANG momentum stocks ended the session lower, with Facebook, Apple, Inc., Amazon.com, Inc., Netflix, Inc. and Google parent Alphabet, Inc. down between 1.1% and 1.9%.

Shares of security and alarm company ADT, Inc. jumped for a second day in a row, closing up five percent as Amazon introduced its new Alexa Guard service which could notify ADT of disturbances in the home.

McDonald’s Corp. rose 2.8% after announcing it would hike its quarterly dividend by 15%.

Under Armour, Inc. gained 2.9% following an upgrade by JPMorgan Chase.

A 2.9% drop in shares of Micron helped pull chipmakers lower after the company said US tariffs on Chinese goods would weigh on its financial results for as much as a year.

Shares of Pier 1 Imports, Inc. plunged 19.9% after the home furnishings retailer cut its secondquarter forecasts.

Advancing NYSE issues outnumbered declining ones by 1.04 to 1; on Nasdaq, a 1.21-to-1 ratio favored decliners. Volume on US exchanges was 10.77 billion shares, nearly 64% more than the 6.57 billion average over the last 20 trading days. —