U.S. Stocks on Track to Snap Two-Week Losing Streak

By Riva Gold Features Dow Jones Newswires

U.S. stocks were little changed Friday, though major indexes were on track to snap a two-week losing streak.

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The Dow Jones Industrial Average declined 8.6 points, or less than 0.1%, to 21074. The S&P 500 and the Nasdaq Composite rose less than 0.1%.

The S&P 500 was on track to end the week up 1.4%, its biggest weekly gain in nearly a month. On Thursday the index notched its 19th record closing high of the year, surpassing the 18 records reached in 2016.

Stocks have risen for six straight sessions, supported by stronger-than-expected first-quarter earnings, expectations for the Federal Reserve to move only gradually and continued signs of a steady economy.

"Better growth and inflation is translating into better revenues: this kind of environment is good for stocks and bad for bonds," said Jeff Knight, global head of investment solutions at Columbia Threadneedle Investments, which manages $467 billion in assets.

While the market is looking expensive and there may be better opportunities overseas, low volatility and high investor confidence suggest there might be a bit further for the market to climb, he said. "We think we're heading toward a period of time when it might be wise to de-risk, but we're not there yet."

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Leading the gains this week are an unlikely combination: shares of utilities companies and technology firms. Both sectors in the S&P 500 were up more than 2% in the past week.

Tech shares are up more than 20% so far this year, as investors have scooped up companies that have outperformed the broader market in the eight years since the financial crisis.

Amazon.com, though classified in the S&P 500 as a consumer company, has risen among big tech names, and its stock traded on Friday within a few dollars of $1,000. Its price has soared from around $68 apiece a decade ago, a sign not only of the company's growth but also how fewer companies are choosing to "split" their stocks to boost the number of shares and lower prices.

Utilities companies, often referred to as bond proxies thanks to their steady dividend payments, also have climbed as inflation expectations under President Donald Trump have moderated.

Separately, energy shares were the biggest losers over the past week, as the price of oil dropped. U.S.-traded crude oil recently climbed 0.5% to $49.15 a barrel, but is still on track to end the week down 3%.

Oil prices declined earlier this week on disappointment that the Organization of the Petroleum Exporting Countries didn't take more aggressive measures to cut production at a meeting in Vienna.

Although OPEC members agreed to extend production cuts through March 2018, "the market had been speculating in deeper cuts and a longer commitment," said Martin Enlund, analyst at Nordea.

Energy stocks in the S&P 500 are on pace to close 2.1% lower on the week.

In currencies, the WSJ Dollar Index edged down 0.1%, deepening this month's losses. The dollar fell 0.7% against the yen, which tends to benefit in times of market stress.

The Stoxx Europe 600 declined 0.2% in recent trading.

Australia's S&P/ASX 200 shed 0.7% amid broad weakness in commodities-focused companies, while Japan's Nikkei was off 0.6% as a stronger yen also weighed on Japanese stocks. Both bourses ended the week with gains.

South Korea's Kospi Composite Index and India's Sensex hit record highs.

Corrie Driebusch contributed to this article.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

May 26, 2017 10:32 ET (14:32 GMT)