S&P, Dow have record day
Russell 2000 also ends on a new high as big banks report earnings and financial stocks falter.
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.