Another winning week for Wall Street

Reports suggest inflation cools while economy powers higher

NEW YORK — Wall Street closed out its latest winning week with a mixed finish Friday, as drops for technology stocks dragged on the market.

The S&P 500 slipped 3.19 points, or 0.1 percent, to 4,890.97. It’s the first decline for the index after a six-day winning streak led it to set record highs for five straight days.

The Dow Jones Industrial Average rose 60.30, or 0.2 percent, to 38,109.43. The weakness for tech stocks, meanwhile, dragged the Nasdaq composite to a loss of 55.13, or 0.4 percent, to 15,455.36.

Intel led chip stocks lower even though it reported stronger profit for the last three months of 2023 than analysts expected. It dropped 11.9 percent after giving forecasts for revenue and profit for the start of 2024 that fell short of Wall Street’s estimates.

KLA, a supplier for the chip industry, also dragged on tech stocks despite reporting better quarterly results than expected. It sank 6.6 percent after saying it still sees market conditions as challenging in the near term and giving a forecast for upcoming revenue that fell short of analysts’ estimates.

The stock market nevertheless closed out another winning week as reports keep suggesting inflation is cooling while the economy continues to power higher. The unexpected backdrop has hopes high that Wall Street’s dream scenario can come true: one where a resilient economy drives profits higher for companies, while inflation moderates enough to get the Federal Reserve to cut interest rates many times this year.

The latest report on Friday showed the measure of inflation the Fed prefers to use behaved just about exactly as expected in December. Overall inflation by that measure was 2.6 percent during the month, matching November’s rate.

The Fed pays more attention to the inflation figure after ignoring prices for food and fuel, which can zigzag sharply month to month. That figure cooled to 2.9 percent from 3.2 percent and was a bit better than economists expected.

At the same time, spending by consumers strengthened by more in December than expected. That helped calm worries that a resilient economy, which has so far refused to fall into a long-predicted recession, would mean upward pressure on inflation.

The expectation is for the labor market to soften some in upcoming months, which would further cool pressure on inflation, but not enough to halt the economy’s growth.