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

By Riva Gold and Corrie Driebusch 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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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.

On Thursday, the S&P 500 notched its 19th record closing high of the year, surpassing the 18 records reached in 2016. It's set to close the week up 1.4%, its biggest weekly gain in nearly a month.

"We've had a strong start to the year, but the question is, is this the calm before the storm?" said Allen Bond, portfolio manager of the Jensen Quality Growth Fund, which manages just over $5 billion.

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, some analysts and fund managers said.

Mr. Bond said he believes recent data points to healthy if not robust economic growth, and that, along with solid earnings, makes him optimistic about where stocks are headed. However, he's made sure his portfolio is well-positioned for any stock-market selloff by buying companies that he believes have meaningful competitive advantages.

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On Friday, the Dow Jones Industrial Average edged up 0.5 points, or less than 0.1%, to 21084. The S&P 500 and the Nasdaq Composite rose less than 0.1%.

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 1.4% to $49.58 a barrel, but is still on track to end the week down more than 2%.

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 2.2% 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%.

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.

Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

May 26, 2017 13:15 ET (17:15 GMT)