NEW YORK — More gains for US stocks on Friday sent Wall Street to its latest record, milestone and winning week.
The S&The P500 rose 0.6% to end a day above the 5,000 level for the first time. It’s the tenth record in less than a month for the index, which completed its fourteenth winning week in the last fifteen, continuing the romp that started around Halloween.
The Nasdaq composite rose 1.2%, coming within 0.4% of its own all-time high, set in 2021. The Dow Jones Industrial Average fell behind a day after setting its own latest record. It fell by 54 points, or 0.1%.
Milestones such as the S&P500 out of 5,000 doesn’t carry much weight for a market that should move based on hard numbers like interest rates, profits and income. But they can stir the animal spirits of a market that can also be sensitive to emotional moves.
The rally on Wall Street got underway on hopes that cooling inflation would prompt the Federal Reserve to ease pressure by cutting rates. Lately, such cuts appear to be coming later than hoped, as reports show the economy is remarkably solid. But that strength has in turn raised expectations for companies’ earnings, which has supported stocks.
Cloudflare was the latest company to soar after reporting stronger earnings than analysts expected for the latest quarter. The cloud services company rose 19.5% after it said it had signed both its largest new customer and largest renewal ever, despite an overall economic environment that “remains difficult to predict.”
Big Tech stocks have been doing most of the heavy lifting in the market, as they have for more than a year, partly because of the mania around artificial intelligence technology. Nvidia, Microsoft and Amazon were the three strongest forces driving the S&P500 rose at least 1.6% after each.
They helped offset a 3.6% decline for PepsiCo, which reported weaker sales for the latest quarter than analysts expected. It says growth is slowing as customers return to their pre-pandemic snacking and other behaviors.
Expedia tumbled 17.8%, despite also reporting stronger-than-expected profits. The company provided forecasts for the first three months of 2024 that analysts said pointed to slower booking growth. The company also announced that a new CEO, Ariane Gorin, will take the helm in May.
Take-Two Interactive, the publisher of “Grand Theft Auto” and other video games, fell 8.7% after reporting weaker-than-expected earnings. It also lowered its earnings forecast for the fiscal year that ends at the end of March.
All in all, the S&The P500 rose 28.70 points to 5,026.61. The Dow Jones fell 54.64 to 38,671.69 and the Nasdaq gained 196.95 to 15,990.66.
Earnings for major companies in the S are largely better than expected&P500 this reporting season, which is roughly two-thirds over. That is usually the case, but according to FactSet, even more companies than usual are doing so this time.
That has helped boost optimism on Wall Street, but opponents say it may have gone too far and sent stocks to overpriced heights.
Traders are pouring into some riskier investments at a pace so rapid that a contrarian gauge from Bank of America is leaning more towards ‘sell’ now than ‘buy’, although this is not at a convincing level. The metric tracks how much fear and greed is in the market, and suggested buying would occur in October, when fear had reached a compelling peak.
In the bond market, government bond yields rose. The yield on the 10-year government bond rose to 4.16% from 4.15% at the end of Thursday.
But the moves were much calmer than earlier in the month, when the 10-year yield rose from 3.85% as traders strongly pushed out expectations for rate cuts.
It’s an encouraging sign that the stock market can continue to hit highs as expectations for an impending rate cut diminish, especially after the market previously seemed to react solely to such predictions.
“A less emotional market is a positive sign, although investors should fight against the complacency that is a natural response to such a strong and steady bull run,” said Mark Hackett, Nationwide’s head of investment research.
On foreign stock markets, indexes were usually modestly lower. Several markets in Asia were closed for the Lunar New Year holiday.
Tokyo’s Nikkei 225 rose 0.1% after hitting a 34-year high earlier in the day.
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AP Business writers Matt Ott and Yuri Kageyama contributed.