Dow, S&P 500 end at record highs Friday, end week with longest streak of closing records since March

The Dow Jones Industrial Average and S&P 500 ended the week with their longest streak of closing records since March 15, after struggling to maintain altitude on Friday after a report on consumer sentiment suggested concerns regarding the spread of the delta variant of the coronavirus and its impact on economic growth.

Profit optimism for companies, including Walt Disney, whose shares rose 1% on Friday after better-than-expected quarterly results, helped support the broader market. However, the Nasdaq Composite Index ended the week down nearly 1% as value-linked investments significantly outperformed growth for the week.

How have the markets behaved?
  • The Dow DJIA,
    + 0.04%
    added 15.53 points, or less than 0.1%, to close at a record 35,515.38, after setting an intraday record of 35,610.57.

  • The S&P 500 SPX,
    + 0.16%
    rose 7.17 points, or 0.2%, to end at a record 4,468.00, following an intraday high of 4,468.37.

  • The Nasdaq COMP Composite Index,
    + 0.04%
    rose 6.64 points, or less than 0.1%, to end at 14,822, after hitting an intraday nadir of 14,797.22 and peaking at 14,850.61.

Thursday marked the first time since March 15, 2021 that the Dow Jones and S&P 500 have closed at a record high for three consecutive days. The Dow closed 14.88 points or 0.04% higher at 35,499.85, the S&P 500 ended the day 13.13 points or 0.30% higher at 4460.83 and the Nasdaq rose by 51.13 points or 0.35% at 14,816.26.

For the week, the Dow Jones recorded a gain of 0.9%, the S&P 500 was up 0.7% and the Nasdaq Composite fell 0.1%.

What drove the market?

The University of Michigan consumer sentiment index fell sharply to 70.2 in August from 81.2 the previous month, marking the lowest level since April 2020, and momentarily cutting the wind from the bullish sails of the market. .

Richard Curtin, chief economist of the Surveys of Consumers, called the drop a “staggering loss of confidence” during the first half of August, which was widespread.

Still, investors bought value-oriented stocks, in part inspired by other economic data this week, such as more subdued consumer price inflation than expected and a drop in weekly jobless claims on Thursday, which , Friday, contributed to a fourth consecutive session. all-time closing highs for the S&P 500 and the Dow.

The IVE iShares S&P 500 Value ETF,
-0.05%
rose 1.1% this week, contributing to a 2% gain for the exchange-traded fund in August so far; while the IVW iShares S&P 500 Growth ETF focused on growth,
+ 0.37%
has seen a weekly gain of 0.4% and is up 1.4% in the month to date, according to FactSet data.

This trade came as the US Senate this week passed a roughly $ 1 trillion infrastructure package with broad bipartisan support, setting it on track for eventual adoption by the House and promulgated by the President. Joe Biden.

“News of a $ 1.2 trillion infrastructure deal has rekindled hopes for a few years of solid economic growth and reignited dynamic cyclical stock trading,” wrote Lindsey Bell, chief investment strategist at Ally Invest in a research note.

Financials in particular were among the best performing among cyclicals, with the financials sector of the S&P 500 SP500.40,
-0.73%
increasing by 1.9% over the week.

“The weakening of relative price trends is also apparent when examining the performance of the average tech stock as well as semiconductors, often a leading indicator for the sector,” wrote Keith Lerner, chief market strategist of Truist Advisory Services.

“Conversely, after the pullback, we see an improvement in comparative pricing trends for some of the cyclical sectors, notably financials, which we remain overweighted; it’s the biggest sector in value style, ”he said.

The spread of the delta variant of the coronavirus and its potential impact on the global economic recovery remains a continuing concern.

Markets also analyzed international trade data on Friday, as U.S. import prices rose 0.3% in July after gaining 1.1% the previous month.

Read: European stocks are set to post a 10th straight gain. Here’s why Bank of America is worried.

Meanwhile, the United States Food and Drug Administration on Thursday evening cleared an additional injection of COVID-19 for people with weakened immune systems, but did not confirm media reports that it would update. emergency use authorizations for Pfizer PFE,
+ 2.62%
and Moderna mRNA,
-0.42%
Vaccines against covid19.

Should know: The S&P 500 is almost 99% above its March 2020 low. These 3 big-tech charts will tell you if things are about to collapse

There have been new concerns over China, which is fighting to control new outbreaks of Covid. The partial closure of one of China’s largest cargo ports due to new cases of Covid has raised new concerns about the impact of the pandemic on international trade.

“These ripples will not only be felt in China, but also around the world. The impact has been most notable in regional stock markets with a high beta for commerce and China, ”said Jeffrey Halley, senior market analyst at Oanda, in a note to clients.

Which companies were the center of attention?
  • Actions of Walt Disney Co.
    SAY,
    + 1.00%
    climbed 1%, after the media and entertainment giant announced its highest sales and profits since the pre-pandemic and forecasts of new subscriber numbers for its streaming service.

  • ContextLogic Inc.
    TO WISH,
    -19.77%
    Shares fell 19.8%, after the parent company of e-commerce site Wish reported slowing demand for its products, less activity on its platform, and higher-than-expected costs.

  • Airbnb Inc.
    ABNB,
    +1.07%
    shares rose 1.1%, after the accommodation reservation company said second-quarter revenue nearly quadrupled to $ 1.3 billion, beating analysts’ forecasts, but failed given specific advice.

  • DoorDash Inc.
    HYPHEN,
    + 3.50%
    shares fell 3.5%, after the online food ordering group reported record second quarter order volume and total orders, but forecast weakness in the third quarter.

How did the other assets behave?
  • The yield on the 10-year TMUBMUSD10Y T-bill was 6.9 basis points lower at 1.29%, but the benchmark is up from 1.28% last Friday. The yields and prices of debt move in opposite directions.

  • The ICE US Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down 0.6% on the session but 0.3% on the week.

  • Oil futures closed lower, along with the US benchmark CL. 1 settling down 0.9% to $ 68.44 a barrel on the New York Mercantile Exchange, but with a gain of 0.2% for the week. GC00 gold futures ended up 1.5% to $ 1,778.20 an ounce, and up about 0.9% on the week.

  • In European equities, the Stoxx Europe 600 SXXP rose 0.2%, while London’s FTSE 100 UKX gained 0.4%. Over the week, the pan-European benchmark gained 1.3% while the FTSE rose 1.3%.

  • In Asia, the Shanghai Composite SHCOMP lost 0.2% and Japan’s Nikkei 225 NIK lost 0.1%, while the Hang Seng HSI index in Hong Kong lost 0.5%.

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