By Mark DeCambre and Christine Idzelis
The Dow and S&P 500 index closed at all-time highs Friday, extending their recent rallies to four weeks in a row, amid a fresh flurry of corporate results to end the first week of earnings season.
Investors digested reports from Morgan Stanley, Bank of New York Mellon, Citizens Financial Group and PNC Financial Services Group.
How did benchmarks trade?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.18% rose 164.68 points to end at 34,200.67, a gain of 0.5%, for a record close.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.06% climbed 15.05 points, or 0.4%, to close at a record 4,185.47.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.54% advanced 13.58 points, or 0.1%, finishing at 14,052.34, its second-highest close ever.
On Thursday , the Dow gained 305.10 points, or 0.9%, to finish at 34,035.99, setting a new closing record and an intraday all-time high earlier in the session. The S&P 500 added 45.76 points to reach 4,170.42, a gain of 1.1%, booking a record, while the Nasdaq Composite Index advanced 180.92 points, or 1.3%, to 14,038.76, ending 0.4% from its Feb. 12 closing record.
For the week, the Dow rose 1.2%, while the S&P 500 gained 1.4% and the Nasdaq Composite advanced 1.1%. The Dow and S&P 500 booked a fourth straight week advance, while the Nasdaq rose for a third week in a row.
What drove the market?
The recovery from the COVID pandemic was on display in this week’s U.S. economic data, including retail sales and weekly jobless benefit claims , which also reflected the massive fiscal stimulus from Washington and the vaccine rollout. The supportive backdrop helped investors push the major stock indexes to new heights.
Earnings also have helped to boost optimism about the recovery, as the nation’s biggest banks, Goldman Sachs Group /zigman2/quotes/209237603/composite GS -0.43% and JPMorgan Chase & Co /zigman2/quotes/205971034/composite JPM -0.27% , produced results that are promising for the American economic outlook.
It’s been “almost a goldilocks week,” Simeon Hyman, global investment strategist at ProShares, told MarketWatch Friday in a phone interview. “There’s no shortage of good news.”
Although investors have been concerned about inflation in the economic reopening, Hyman said that capacity utilization was a “little bit of help” this week as it came in “just a little lighter than expected yesterday but still expanding.” Capacity utilization rose to 74.4 in March, from 73.4 in February. The typical tipping point for driving “notable inflation” is 80, according to Hyman.
Hope for further improvement comes as China’s economic growth surged by 18.3% year-over-year in the first quarter, with retail sales up 34.2% in the world’s second largest economy. A number of experts noted that China’s GDP growth data on a quarterly basis, however, was lower than been expected and reflects a slackening pace of improvement.
Macroeconomic data over the next several months will be “extremely messy” as the world is now about a year out from the initial lockdowns in the pandemic, cautioned Jason Vaillancourt, co-head of global asset allocation at Putnam Investments, in an interview with MarketWatch Friday. Instead of making year-over-year comparisons, Vaillancourt suggested that investors look further back to 2019 to measure growth relative to pre-COVID times.
“The pandemic only got started in a big way,” at the end of March 2020, he said, as it was around then that many people began staying home to avoid spreading the virus.