U.S. stocks closed on a firm note on Friday as optimism about strong economic growth outweighed concerns about inflation, prompting traders to build up fresh positions at several counters.
The major averages all closed higher, with the S&P 500 hitting a new record high in the session and recorded its biggest weekly gain since February 2021, rising 2.7%. The index ended the session with a gain of 14.21 points or 0.33 percent at 4,280.70, slightly off a new high of 4,286.12.
The Dow, which climbed 3.4% in the week, its biggest weekly gain since March, ended Friday’s session with a gain of 237.02 points or 0.69 percent at 34,433.84, while the Nasdaq edged down 9.32 points or 0.06 percent to settle at 14,360.39. The Nasdaq gained about 2.4 percent in the week.
The Federal Reserve last week forecast rate hikes in 2023, but traders seemed to bet on hopes a tighter monetary policy is not imminent and despite any tapering of asset purchase program sometime in the not-too-distant future, the program will continue to support markets until that time.
The Fed is likely to begin tapering its asset purchase program in the not-too-distant future, but the program will continue to support the markets until that time.
In economic news today, a report from the Commerce Department showed the annual rate of core consumer price growth in May matched economist estimates. The reading on inflation said to be preferred by the Fed showed the annual rate of core consumer price growth accelerated to 3.4 percent in May from 3.1 percent in April.
The Commerce Department also said personal income slumped by 2.0 percent in May after plunging by 13.1 percent in April. Economists had expected personal income to tumble by 2.5 percent.
Meanwhile, the report showed personal spending was virtually unchanged in May after climbing by 0.9 percent in April. Personal spending was expected to rise by 0.4 percent.
A report from the University of Michigan said that its consumer sentiment reading for the US was revised lower to 85.5 in June from a preliminary reading of 86.4. Although market had expected to score to come in at 87.4, it still remained the second-highest since start of the pandemic.
Among the major movers, Nike soared more than 15 percent, hitting a new high in the process, after saying that its expects full-year sales to top $50 billion thanks to a rebound in its North American business. Nike reported fourth-quarter profit of $1.51 billion or $0.93 per share, compared to net loss of $0.79 billion or $0.51 per share last year.
Honeywell International, Amgen, Merck, Procter & Gamble, United Health, JP Morgan Chase and Walmart posted strong gains.
In overseas trading, the major European markets turned in a mixed performance, while Asian stocks closed mostly higher.
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