Closing Market Summary: S&P Notches First Record Close Since JanuaryFriday was a record-setting day for the stock market, with the S&P 500 (+0.6%) notching its first record close (2874.69) since January 26. The Nasdaq (+0.9%) also registered a fresh record finish, as did the small-cap Russell 2000 (+0.5%). The Dow (+0.5%) advanced, but finished about 3.0% below its January record high.
The market extended opening gains after Fed Chairman Jerome Powell didn't say anything upsetting in his speech at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming. Mr. Powell reiterated that gradual rate hikes remain appropriate, adding that he doesn't see any signs that inflation is getting out of hand.
On the international front, investors brushed off news that two days of trade talks between the U.S. and China ended on Thursday without any visible sign of progress. That result was expected as President Trump said beforehand that he didn't believe much would come from the negotiations.
Separately, President Trump tweeted on Friday afternoon that he's asked Secretary of State Mike Pompeo not to go to North Korea because there has not been sufficient progress with respect to the decentralization of the Korean Peninsula. The stock market had a muted reaction to the tweet.
Wall Street's gains were broad-based on Friday with 10 of 11 sectors advancing.
The lightly-weighted materials sector (+1.2%) was the top-performing group, followed closely by the top-weighted technology sector (+1.1%). Within the tech space, software company Autodesk (ADSK 157.20, +20.89) spiked 15.3% after reporting better-than-expected earnings and revenues on Thursday evening.
In other earnings news, retailers dominated the headlines once again with Gap (GPS 29.65, -2.79) and Foot Locker (FL 48.32, -4.88) tumbling 8.6% and 9.2%, respectively, and Buckle (BKE 26.55, -1.25) dropping 4.5% in reaction to their quarterly results. Conversely, Ross Stores (ROST 95.09, +0.06) ticked up 0.1%.
The consumer staples sector (-0.2%) was the lone decliner, but financials (+0.3%), industrials (+0.4%), and utilities (+0.4%) also underperformed.
Looking at other markets, U.S. Treasuries finished slightly lower, pushing the benchmark 10-yr yield up one basis point to 2.83%. Meanwhile, the U.S. Dollar Index gave back nearly all of Thursday's rebound, dropping 0.5% to 95.05, and West Texas Intermediate crude futures jumped 1.2% to $68.66/bbl.
Reviewing Friday's economic data, which was limited to July Durable Goods Orders:
- July durable goods orders declined 1.7% (consensus -0.6%), and the prior month's reading was revised to +0.7% (from +1.0%). Excluding transportation, durable orders increased 0.2% (consensus +0.4%) to follow the prior month's revised reading of +0.1% (from +0.4%).
- The key takeaway from the report is that the headline decrease masked a 1.4% increase in orders for nondefense capital goods, excluding aircraft, which is a positive sign about business spending
Looking ahead, investors will not receive any notable economic data on Monday.
- Nasdaq Composite +15.1% YTD
- Russell 2000 +12.4% YTD
- S&P 500 +7.5% YTD
- Dow Jones Industrial Average +4.3% YTD
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