S&P, Dow have record day

Rus­sell 2000 also ends on a new high as big banks re­port earn­ings and fi­nan­cial stocks fal­ter.

The Denver Post - - BUSINESS - By Alex Veiga The As­so­ci­ated Press

Gains by big tech­nol­ogy and health care com­pa­nies pushed U.S. stocks mod­estly higher Fri­day, lift­ing sev­eral ma­jor in­dexes to new highs.

The Stan­dard & Poor’s 500 in­dex, Dow Jones in­dus­trial av­er­age and Rus­sell 2000 in­dex of smaller-com­pany stocks each set records as the mar­ket posted its third straight day of gains.

En­ergy com­pa­nies helped lift the mar­ket as crude oil prices rose. High-div­i­dend stocks like real es­tate com­pa­nies and util­i­ties also posted big gains fol­low­ing a drop in bond yields. The lower yields and a weak fore­cast from JPMor­gan Chase weighed on banks. Fi­nan­cial stocks were the only sec­tor in the S&P 500 to end lower.

In­vestors brushed off a re­port show­ing U.S. re­tail sales de­clined in June and drew en­cour­age­ment from data indi­cat­ing in­dus­trial pro­duc­tion re­bounded last month. Traders also wel­comed a re­port show­ing in­fla­tion at the con­sumer level was flat in June, which sug­gests that the Fed­eral Re­serve may have more rea­son to de­lay an­other in­ter­est rate in­crease.

“The low in­fla­tion data will put the Fed more in a wait-and-see mode to re­ally de­ter­mine if the low in­fla­tion­ary en­vi­ron­ment is re­ally tran­si­tory,” said Lind­sey Bell, in­vest­ment strate­gist at CFRA Re­search.

The S&P 500 in­dex gained 11.44 points, or 0.5 per­cent, to 2,459.27. The Dow rose 84.65 points, or 0.4 per­cent, to 21,637.74. The av­er­age has hit a record high three days in a row.

The Nas­daq com­pos­ite added 38.03 points, or 0.6 per­cent, to 6,312.47. The Rus­sell 2000 in­dex picked up 3.16 points, or 0.2 per­cent, to 1,428.82.

The in­dexes all ended the week with gains are on pace to fin­ish higher this month.

Sev­eral big banks re­ported their sec­ondquar­ter earn­ings on Fri­day. Among them were JPMor­gan Chase, Cit­i­group and Wells Fargo, each of which posted re­sults that beat Wall Street’s ex­pec­ta­tions. But it wasn’t all good news.

JPMor­gan, the na­tion’s largest bank by as­sets, said it ex­pects weaker net in­ter­est in­come. Fall­ing bond yields also weighed on the sec­tor.

When bond yields de­cline, it forces in­ter­est rates on loans lower, which makes it harder for banks to make money from lend­ing.

JPMor­gan fell 85 cents, or 0.9 per­cent, to $92.25, while Cit­i­group slid 30 cents to $66.72. Wells Fargo lost 61 cents, or 1.1 per­cent, to $54.99.

“It’s an en­cour­ag­ing sign that the mar­ket is ro­tat­ing out­side of fi­nan­cials, but (in­vestors) didn’t use it as a cat­a­lyst to take down the whole mar­ket,” said Vic­tor Jones, trad­ing di­rec­tor at TD Amer­i­trade.

Tech­nol­ogy and health care com­pa­nies were among the big gain­ers. NetApp led all S&P 500 com­pa­nies, climb­ing $2.26, or 5.5 per­cent, to $43.64. Mi­crosoft rose $1.01, or 1.1 per­cent, to $72.78. Zim­mer Biomet Hold­ings gained $3.51, or 2.7 per­cent, to $132.49.

En­ergy fu­tures closed higher. Bench­mark U.S. crude rose 46 cents, or 1 per­cent, to set­tle at $46.54 per bar­rel on New York Mer­can­tile Ex­change. Brent crude, used to price in­ter­na­tional oils, gained 49 cents, or 1 per­cent, to $48.91 per bar­rel in Lon­don.

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