The S&P 500 inched lower Friday but held on to a weekly gain as signs of health in corporate profits boosted shares.
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With major indexes holding near records, some investors and analysts said continued gains will depend on robust earnings. Reports so far have generally been solid, said David Lefkowitz, senior equity strategist at UBS Wealth Management Americas.
"The initial read here looks pretty favorable," Mr. Lefkowitz said. "There are always pockets of strengths and weakness within earnings season, but overall it's been more strength than weakness," he said.
The Dow Jones Industrial Average fell 31.71 points, or 0.1%, to 21580.07, finishing the week down 0.3% and snapping a two-week streak of gains. The S&P 500 declined 0.91 point, or less than 0.1%, to 2472.54, and the Nasdaq Composite declined 2.25 points, or less than 0.1%, to 6387.75.
Both the S&P 500 and Nasdaq ended the week higher and near records, though Friday's declines ended the Nasdaq's 10-session winning streak. It was the tech-heavy index's longest such streak since February 2015.
Losses in energy shares weighed on the S&P 500 Friday, as U.S. crude for August delivery fell 2.5%, to $45.77 a barrel, amid concerns that oil exporters won't stick to output cuts. Energy stocks in the S&P 500 fell 0.9% Friday and are down roughly 14% in 2017.
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Technology stocks in the S&P 500 slipped less than 0.1% Friday, concluding a week in which the index's tech sector reached a new high for the first time in almost 20 years.
Tech shares have gained 23% this year, making the sector the best-performer in the S&P 500. Some analysts tech stocks remain attractive because of the ability of those companies to increase earnings even in times of tepid economic growth.
Microsoft shares slipped 43 cents, or 0.6%, to $73.79 Friday, despite posting a jump in profits after the market closed Thursday that beat analyst projections. Earlier in the week, shares of Netflix, which is classified as a consumer stock in the S&P 500 but often grouped with highflying technology firms, had their best day of the year after the streaming giant beat its subscriber-growth estimate.
Facebook and Amazon.com have flirted with share-price milestones this week ahead of upcoming earnings. Amazon, also technically a consumer stock, ended the week up 2.4% and influenced major stock moves on Thursday after Sears announced it would sell Kenmore appliances directly on the e-commerce giant's website. The news dragged down other appliance sellers like Home Depot and Lowe's.
Earnings reports drove some of the biggest stock moves Friday.
Shares in eBay fell 57 cents, or 1.5%, to 36.61 on Friday after the e-commerce company late Thursday reported earnings that were largely in line with Wall Street expectations.
Shares of Dow component General Electric declined 78 cents, or 2.9%, to 25.91 after the company reported a smaller-than-expected fall in earnings. Many analysts are skeptical that the industrial giant can meet its future financial targets.
Cintas rose 11.65, or 9.2%, to 138.43, and Capital One added 6.93, or 8.6%, to 87.94 Friday after earnings beat analysts' expectations.
Although the companies that have reported so far have increased earnings more than Wall Street anticipated, some investors caution that future projections might be getting too optimistic.
"We need strong earnings growth to see the rally continue, and we're not sure we're going to get that," said Jeroen Blokland, a senior portfolio manager at Dutch asset manager Robeco.
Investors also kept a close eye on central bank meetings in Europe and Japan this week. Many expect global central banks to move slowly when withdrawing their monetary stimulus because of weak economic growth, providing favorable conditions for stocks and bonds.
The yield on the 10-year U.S. Treasury note fell to 2.232% from 2.266% Thursday, posting its largest two-week decline since March. Yields fall as prices rise. Utility shares, known as bond proxies because they pay relatively high dividends, were the best-performing S&P 500 sector on Friday, rising 0.8% to post a weekly gain of 2.6%.
The euro rose 0.3% against the dollar Friday to its highest New York closing level since January 2015, a day after leaping 1% when European Central Bank President Mario Draghi reaffirmed his confidence in the eurozone economy. The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, ended down 0.3% Friday, recording its lowest close since September.
"We have Goldilocks growth prospects with improving economic fundamentals, but inflation is missing in action. That allows central banks to go cautiously in terms of normalizing monetary policy," said Arnab Das, head of EMEA and emerging-market macro research at Invesco Fixed Income.
Elsewhere, European stocks were broadly lower, dragged down by a fall in auto and construction stocks. The Stoxx Europe 600 declined 1%.
Earlier, Japan's Nikkei Stock Average ended 0.2% lower and Hong Kong's Hang Seng Index fell 0.1%.
Write to Christopher Whittall at email@example.com
(END) Dow Jones Newswires
July 21, 2017 18:28 ET (22:28 GMT)