S&P 500 ral­lies to close its 5th straight win­ning week

Daily Southtown (Sunday) - - BUSINESS - By Stan Choe and Damian J. Troise

NEW YORK — The gains keep pil­ing up on Wall Street, and the S&P 500 ral­lied again on Fri­day to close out its fifth straight win­ning week.

The bench­mark in­dex rose 23.46, or 0.7%, to 3,508.01, set­ting an­other record high. It was the sev­enth straight day of gains for the in­dex. It also capped a 3.3% rally for the week to ce­ment its long­est weekly win­ning streak since De­cem­ber, be­fore the coro­n­avirus pan­demic swept the world and sent economies tum­bling into re­ces­sion.

The Dow Jones In­dus­trial Aver­age ral­lied 161.60, or 0.6%, to 28,653.87 and clawed its way back to a tiny gain for the year. It’s just 0.4%, but it’s the first time the Dow has been up for 2020 since late Fe­bru­ary.

The Nas­daq com­pos­ite climbed 70.30, or 0.6%, to 11,695.63 to set an­other record. It’s lapped the other U.S. stock in­dexes many times over, thanks to mar­ket-lead­ing gains for big tech­nol­ogy stocks, and it’s up 30.3% for 2020 so far.

A re­port re­leased be­fore trad­ing be­gan showed that U.S. con­sumer spend­ing grew more in July than econ­o­mists ex­pected. That’s key be­cause con­sumer spend­ing is the main driver of the na­tion’s econ­omy. Con­sumers in­creased their spend­ing by 1.9% for the third straight month of gains, though it was a slow­down from June’s 6.2% growth.

In­come also rose by 0.4% for Amer­i­cans last month, snap­ping back from a drop in June. It adds to other re­ports show­ing the econ­omy has im­proved since the worst of the busi­ness lock­downs of the spring, though it re­mains well below where it was be­fore the pan­demic. Data re­cently has also been rel­a­tively mixed.

Tech­nol­ogy stocks again helped to pull the mar­ket higher. HP rose 6.1% after it re­ported bet­ter profit for the lat­est quar­ter than an­a­lysts ex­pected. The pan­demic means more peo­ple are work­ing and learn­ing — and print­ing doc­u­ments — from home, which helps HP’s sales.

Stocks are con­tin­u­ing to rise after the Fed­eral Re­serve on Thurs­day un­veiled a change in strat­egy that likely means in­ter­est rates will stay low for a long time, even if in­fla­tion rises above the 2% tar­get level of the cen­tral bank. It’s some­thing Fed Chair Jerome Pow­ell called a form of “aver­age in­fla­tion tar­get­ing” in a widely an­tic­i­pated speech, and its full ram­i­fi­ca­tions are still to be de­ter­mined.

Low in­ter­est rates and mas­sive amounts of bond pur­chases by the Fed have helped prop up the econ­omy, and they’re a cen­tral rea­son the S&P 500 has been able to re­cover from its nearly 34% plunge ear­lier this year, even though the pan­demic is still rag­ing.

With aid from the Fed­eral Re­serve in place, in­vestors want to see Congress de­liver more sup­port for the econ­omy. Weekly ben­e­fits it ap­proved ear­lier for un­em­ployed work­ers have run out, and in­vestors say the econ­omy des­per­ately needs an­other life­line from Capi­tol Hill.

“You can al­ready see some cracks form­ing in what con­sumer spend­ing will look like if there isn’t much sup­port in the fu­ture,” said Jamie Cox, man­ag­ing part­ner for Har­ris Fi­nan­cial Group.

BE­BETO MATTHEWS/AP

The Dow is up for the first time in 2020 since Fe­bru­ary. Above, the New York Stock Ex­change.

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