Market Roundup
Rising retailers pushed U.S. stock indexes further into record territory Friday, as the market’s fabulous start to 2018 carried through its second week.
Interest rates climbed after a report showed that a key component of inflation accelerated last month. But stocks absorbed the gains without a hiccup, unlike earlier in the week when rate worries helped cause the Standard & Poor’s 500 to edge down for its lone blemish this year.
The S&P 500 rose Friday to close out its seventh week of gains in the last eight. The index is already up more than 4% for 2018.
Retailers led the way after a government report confirmed the holiday shopping season was strong. The numbers fit with what individual retailers have said recently. Shares of Kohl's, Target, Nordstrom and Dollar Tree jumped more than 3%.
Treasury yields rose after a key measure of inflation rose more last month than economists expected.
The yield on the two-year Treasury rose to 2% from Thursday’s 1.98%. The yield on the 10-year Treasury note ended up holding steady at 2.54% after climbing as high as 2.59% in the morning.
Investors have been preparing for a gradual rise in rates, as the Federal Reserve slowly removes the aid it provided the economy following the Great Recession. The worry is that a surprise spike in inflation would force central banks to move more quickly on rates than investors expect, which could upset markets.
Stocks have been remarkably calm and strong for more than a year. Sandy Villere, a partner and portfolio manager at Villere & Co., said he’s optimistic that stocks can rise even further, in part because the economy is strengthening and Washington's tax overhaul will boost corporate profits.
But some caution is starting to creep in as prices keep climbing. Villere said he’s holding more cash than in prior years as the types of stocks he prefers become more difficult to find: companies with strong growth but low prices relative to their earnings and growth.
The next tests for companies will arrive in the coming weeks, as they report results for the last quarter of 2017.
Financial companies are some of the earliest to report. BlackRock jumped 3.3% to $555.53 after it reported stronger earnings than analysts expected.
Facebook fell 4.5% to $179.37 after the social media giant said it will show users fewer posts from brands and fewer videos.
The euro jumped to $1.2181 from $1.2036. The dollar held steady at 111.09 yen.
Benchmark U.S. crude rose 50 cents to settle at $64.30 a barrel. Brent crude, the international standard, rose 61 cents to $69.87 a barrel. Natural gas rose 12 cents to $3.20 per 1,000 cubic feet. Heating oil rose a penny to $2.09 a gallon. Wholesale gasoline rose 1 cent to $1.85 a gallon.
Gold rose $12.40 to settle at $1,334.90 an ounce. Silver rose 18 cents to $17.14 an ounce. Copper fell a penny to $3.22 a pound.