Adam Logan, foreground, works with a fellow trader Friday on the floor of the New York Stock Exchange. Colin Ziemer/New York Stock Exchange via AP
Wall Street capped another week of gains with more milestones Friday, as strength in technology and health care stocks helped push the S&P 500 and Dow Jones Industrial Average to all-time highs.
The S&P 500 rose 0.8 percent for its fourth record high this week and third straight weekly gain. The Dow’s latest milestone followed an all-time high on Monday.
Stocks have benefited this week as bond yields, which had been steadily ticking higher, retreated from highs hit earlier in the month. Higher yields can slow down the economy by pushing up interest rates, making it more expensive for people and businesses to borrow money. Bond yields rose Friday, but that didn’t weigh on stocks.
“The S&P 500 finished at another all-time high today as investors have become comfortable enough with the current level of interest rates and inflation to keep putting money into equities,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
A late-afternoon burst of buying pushed the major stock indexes higher. The S&P 500 rose 31.63 points to 4,128.80. The Dow gained 297.03 points, or 0.9 percent, to 33,800.60. The Nasdaq composite picked up 70.88 points, or 0.5 percent, to 13,900.19.
Small company stocks, which have outgained the broader market this year, lagged behind on Friday. The Russell 2000 index of smaller companies inched up 0.88 points, or less than 0.1 percent, to 2,243.47. Still, the index is up 13.6 percent so far this year, while the S&P 500, which tracks large companies, is up 9.9 percent.
Big Tech stocks were among the better performers. Apple rose 2 percent, Microsoft gained 1 percent and Intel added 1.8 percent. Health care companies also helped lift the market. UnitedHealth climbed 3.1 percent and Cigna rose 3.3 percent.
Financial companies also rose, aided by the rise in bond yields, which translates into higher interest rates lenders can charge on mortgages and other loans. State Street gained 2.4 percent and Wells Fargo added 1.2 percent.
The yield on the 10-year U.S. Treasury note, which influences interest rates on mortgages and other loans, rose to 1.66 percent from 1.63 percent late Thursday. It had been as high as 1.75 percent on Monday.
Most analysts expect inflation to increase as the economy improves.
“We’re seeing some evidence of inflation creeping into the marketplace, but it’s not problematic,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.
The market’s latest gains are in line with its upward tack this week as investors weigh concerns about the virus tripping up a steady economic recovery against progress in vaccinations and business reopenings.
Investors are showing cautious optimism about the economic recovery, especially in the U.S., where vaccine distribution as been ramping up and President Biden has advanced the deadline for states to make doses available to all adults to April 19.
“There’s optimism on the horizon that overall economic growth will continue as the year unfolds,” Sandven said.
But it’s clear the recovery has a long way to go. The number of Americans who filed for unemployment benefits last week rose again last week, as many businesses remain closed or partially shut down due to the pandemic.
In remarks to the International Monetary Fund on Thursday, Federal Reserve Chairman Jerome Powell said a number of factors are putting the nation “on track to allow a full reopening of the economy fairly soon.”
Investors will turn their attention to quarterly results next week, when earnings season gets underway. The major banks are among the first to report their results, including JPMorgan, Wells Fargo and Bank of America. Analysts polled by FactSet have hiked their profit forecasts during the quarter. They expect growth of just over 24 percent, compared with the view back in September that companies in the S&P 500 would see 13 percent growth.
“On balance, we’re seeing earnings accelerate to provide valuation support,” Sandven said.
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