Wall Street added to its recent gains on Friday as stocks closed higher, propelling the S&P 500 to its best week since July.
The S&P 500 rose 0.7% for its third consecutive gain and ended the week up 1.8%. The Dow Jones Industrial Average rose 1.1% and the Nasdaq composite rose 0.5%.
The latest rally came as investors greeted encouraging quarterly newsletters from several companies. Freight forwarder JB Hunt Transport Services led the way for the S&P 500, which jumped 8.7% after reporting higher summer profits than Wall Street expected. Goldman Sachs rose 3.8% and Alcoa jumped 15.2% after exceeding earnings expectations and announcing the payment of a dividend and the repurchase of its shares.
The company’s positive profits were consistent with a report showing people spent a lot more at U.S. retailers last month than Wall Street expected. Sales at stores, restaurants and other retail establishments rose 0.7% from August instead of falling, as forecast by economists.
âWe saw retail sales this morning being pretty strong,â said Sameer Samana, senior global markets strategist at the Wells Fargo Investment Institute. “(The stocks) are still at fairly reasonable valuations with another earnings season just unfolding, and so far at least, very good results.”
The S&P 500 gained 33.11 points to 4,471.37. The Dow Jones gained 382.20 points to 35,294.76 and the Nasdaq rose 73.91 points to 14,897.34.
Friday’s gain follows a 1.7% jump for the S&P 500 on Thursday, its best day since March, which was fueled by stronger-than-expected earnings reports and encouraging data on the labor market.
This is a turnaround after a few volatile weeks, when the benchmark fell 5.2% from its September 2 high. price around. The S&P 500 is back within 1.5% of its all-time high.
The earnings reporting season has just started, but early indicators are encouraging. All but one of the 19 S&P 500 companies that released quarterly results this week beat analysts’ earnings expectations. Such a strength is crucial after rising interest rates have raised fears that stock prices have risen too dearly relative to earnings.
Stronger-than-expected reports on the economy are also helping calm discussions of “stagflation,” which is the dreaded marriage of a stagnant economy and high inflation.
Of course, it is not yet clear. A report released Friday showing consumer sentiment weaker than expected amid inflation concerns helped limit market gains.
Still, shares of companies whose earnings are most closely tied to the strength of the economy, including retailers, automakers and travel-related companies, led the way higher on Friday. Amazon rose 3.3%, Tesla added 3%, and Marriott International gained 3.1%.
Besides financial companies, which benefited from better-than-expected earnings reports from several large banks, industrial and healthcare companies were also among the biggest winners. Caterpillar rose 2.4%, while UnitedHealth added 1.8%.
Johnson & Johnson gained 0.7% after a Food and Drug Administration panel approved booster doses of the company’s single-shot COVID-19 vaccine. The panel said on Friday that the booster should be offered at least two months after vaccination, but did not suggest a firm deadline.
Treasury yields also rose on the back of the much stronger than expected retail sales report. The yield on the 10-year note climbed to 1.57% from 1.52% Thursday night.
âThe biggest surprise about rates continues to be how low they are compared to all the anecdotal evidence and inflation data that we see,â Samana said.
The rise in Treasury yields in recent weeks has recently held back technology and other high-growth stocks. When bonds pay more interest, investors are not as willing to wait as long for large earnings growth expectations to materialize or to pay such high prices for them.
S&P 500 tech stocks performed a little better on Friday, matching the market as a whole with a gain of 0.8%, while the communications services sector which includes many internet companies slipped 0.1% .
Overseas stock exchanges also posted gains. In Europe, the German DAX gained 0.8% and the French CAC 40 gained 0.6%. The FTSE 100 in London rose 0.4%.
In Asia, Tokyo’s Nikkei 225 gained 1.8%, Hong Kong’s Hang Seng 1.5% and Seoul’s Kospi 0.9%.
The benchmark US oil price rose 1.2% to $ 82.28 per barrel, continuing a powerful run that has pushed it up over 70% this year and stoked concerns about high inflation. The global benchmark for crude climbed 1%, although the price of US natural gas fell 4.9%.
AP Business Writer Elaine Kurtenbach contributed.
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