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Stock indices closed another wobbly trading day on Wall Street with a patchy end Thursday that includes more all-time highs for the S&P 500 and Nasdaq.
The benchmark S&P 500 rose 0.4%, extending its winning streak to a sixth day. The index has seen a succession of record closings, often on days when the market has experienced a downturn.
The Nasdaq climbed 0.8%, its ninth consecutive gain and its latest record for the technology-intensive index. The Dow Jones Industrial Average slipped less than 0.1%, ending the blue chip index’s five-day winning streak.
More companies in the S&P 500 fell than they rose, but the gains of several large tech companies helped offset losses elsewhere in the market.
Despite mixed results, the latest market milestones underscore how traders remain in a buying mood, encouraged by strong corporate earnings and the Federal Reserve’s decision, at least for now, to start slowly. to slow down policies aimed at stimulating US economic growth when it was in the grip of the pandemic recession.
On Wednesday, the Fed announced it would start cutting its $ 120 billion monthly bond purchases in the coming weeks by $ 15 billion per month. The central bank may decide to raise its short-term interest rate, which affects many consumer and business loans, to close to zero. Many market watchers have concluded that the Fed is acting cautiously in reducing its support, which is good news for Wall Street.
“90% of this is ultra-accommodative monetary policy,†Jay Hatfield, CEO of Infrastructure Capital Advisors, said of what helped push stocks to new highs on Thursday.
“The very mechanism that causes inflation to rise also causes asset prices to rise, so that is where the dilemma lies,†he said. “The fact that we will not have a corporate tax increase is also extremely optimistic.”
The S&P 500 gained 19.49 points to 4,680.06. The index is on track for its fifth consecutive weekly gain. The last time this happened was in July and August of last year.
The Dow Jones fell 33.35 points to 36,124.23, while the Nasdaq added 128.72 points to 15,940.31.
Small business stocks also lost ground. The Russell 2000 Index slipped 1.85 points, or 0.1%, to 2,402.43.
Investors continued to focus on the latest round of corporate earnings. Chipmaker Qualcomm jumped 12.7% after giving investors encouraging earnings forecasts and posting strong quarterly results. Other chipmakers have joined in as well. Nvidia grew 12% and Advanced Micro Devices grew 5.3%.
A mix of businesses that depend on direct consumer spending for goods and services also made strong gains. Tesla rose 1.3%, eclipsing the all-time high set a day earlier.
Bond yields have fallen. The 10-year Treasury yield fell to 1.52% from 1.58% on Wednesday night. Falling yields have weighed on banks, which rely on higher yields to charge more lucrative interest on loans. Bank of America fell 2.2%.
Strong earnings and financial guidance helped video game maker Electronic Arts gain 2.1% and Take-Two Interactive up 4.8%.
Moderna fell 17.9% after slashing its forecast for the number of vaccine deliveries it plans to make this year. Merck rose 2.1% after UK authorities approved its antiviral pill.
The impact of supply chain issues on corporate earnings and operations has been a top concern for investors amid the latest round of earnings. Roku is the latest company to suffer from these disruptions and higher costs. The video streaming company fell 7.7% after giving investors weak sales forecasts and warning that supply chain problems will likely continue into 2022.
Inflation concerns are likely to focus more investors’ attention on how companies maintain their profit margins for the rest of the year, rather than measuring earnings growth, said Liz Ann Sonders, chief strategist of investments at Charles Schwab.
“The market realizes that the tailwind of perpetual improvement in earnings is dissipating,†she said.
Investors received an encouraging update on the recovery in the labor market. The Labor Department reported Thursday that the number of Americans claiming unemployment benefits fell to another pandemic low last week, another sign that the labor market is recovering from last year’s coronavirus recession. The agency will release its more detailed jobs report for October on Friday.
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