Wall Street indexes made their second round of records for the week on Friday. The benchmark S&P 500 index as well as the Nasdaq composite reach new highs in trading on Friday April 26th, in a late day burst of buying activity. Both of the U.S. stock indexes, which had spent most of the early day in a sideways drift, had also set new high records on Tuesday. As reported by VIN News, the record milestones came as investors evaluated a mix of corporate earnings. Solid quarterly reports from Ford and Amazon helped raise the market. The Dow Jones Industrial Average did not fare as well this week. Weaker reports from Intel and Exxon Mobil put a damper on the Dow, which managed a meager gain, but ended the week slightly lower.
The S&P 500 rose 13.71 points, or 0.5%, to 2,939.88. The broad index is now up an impressive 17.3% this year. The Dow gained 81.25 points, or 0.3%, to 26,543.33. The Nasdaq composite recovered from an early slide, adding 27.72 points, or 0.3%, to 8,146.40. The Russell 2000 index of smaller company stocks climbed 16.20 points, or 1%, to 1,591.82. Major European stock indexes ended mostly higher. Bond prices rose, with the yield on the 10 year Treasury dropping to 2.50% from 2.53% late Thursday. Overall, smaller company stocks did better than the rest of the market, which is a bullish sign indicating that investors were willing to take on more of a risk.
Though company earnings results were mixed, investors drew confidence from a government report which estimates that the U.S. economy grew at a solid 3.2% annual rate in the first three months of the year. The rate of growth for the economy was much better than expected. “The first quarter number is typically the weakest of the year, so the fact that this number was so strong is a positive sign going forward,” said Cliff Hodge, director of investments for Cornerstone Wealth.
In particular, the new all-time record for the S&P 500 is quite impressive being that in 2018 the index took a nosedive amid fears of a recession, coupled with anxiety over the trade war between the U.S. and China, and fear that the Federal Reserve was raising interest rates too fast. Now those fears seem to be calmed after the Fed has signaled that it may at last be done raising rates, and may not increase interest rates at all in 2019. Also economic data out of China has improved and it seems Washington and Beijing are making progress in resolving their costly trade dispute. So far, about a third of U.S. companies have released their first quarter reports. Things are looking bright from what we have thus far. Companies have mostly met their profit forecasts.
“It’s marginally better than expected, so the market has rallied a bit,” said Andrew Slimmon, managing director and senior portfolio manager at Morgan Stanley Investment Management. “With no recession, the market was due for a bounce back,” he added.