MARKET SNAPSHOT: S&P 500, Nasdaq Add To String Of 2018 Records As Investors Shake Off Shutdown Fears
Major indexes post third straight weekly advance
U.S. stocks on Friday finished the day and week higher, with both the S&P 500 and the Nasdaq ending at records as optimism over corporate earnings outweighed the threat of a government shutdown.
While a shutdown is seen as having little impact on the pace of economic growth, such an outcome would add another element of uncertainty to a market that is already seen as trading at lofty levels, and which hasn't seen even a mild decline in more than a year.
Read: A government shutdown 'could reintroduce investors to the fact that markets go down' (http://www.marketwatch.com/story/a-government-shutdown-could-reintroduce-investors-to-the-fact-that-markets-go-down-2018-01-19)
What did stock indexes do?
The Dow Jones Industrial Average rose 53.91 points, or 0.2%, to 26,071.72, after spending much of the day in the red. The S&P 500 index rose 12.27 points, or 0.4%, to 2,810.30. The Nasdaq Composite Index added 0.6%, or 40.33 points, to 7,336.38. Both the S&P and the Nasdaq ended at records and touched intraday highs during the session. The Dow, meanwhile, is within half a percentage point of an all-time peak.
With the day's move, the S&P 500 has now gone 395 sessions without a decline of 5%, an unprecedented length of time (http://www.marketwatch.com/story/heres-another-milestone-the-sp-500-could-surpass-this-month-2018-01-03).
For the week, the Dow and Nasdaq rose 1% while the S&P 500 gained 0.9%.
Both the Dow and the S&P 500 posted their third straight weekly advance, as well as their eighth positive week of the past nine. The Nasdaq also recorded its third positive week in a row, as well as its fifth of the past six.
Read:Here's how stocks handled past government shutdowns (http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)
Even with the uncertain political backdrop, stocks have continued their march higher in 2018. The S&P 500 is up 5.1% so far this month, while the Nasdaq has jumped 6.3%. The solid start to the new year comes on signs economic growth remains strong and corporate earnings are picking up.
Read: Why ditching stocks in this bull market is a 'dangerous' move (http://www.marketwatch.com/story/dont-ditch-the-bull-market-its-dangerous-to-be-out-of-stocks-top-uk-fund-manager-says-2018-01-16)
What is driving the markets?
The House on Thursday passed a one-month spending bill that would keep the government funded through Feb. 16, but the stopgap measure currently doesn't have enough support to clear the Senate. The current interim funding bill that was passed in December expires at 12:01 a.m. Eastern Time, on Saturday.
The Senate adjourned without a final vote late on Thursday and reconvened at 11 a.m. Eastern Time on Friday.
What are strategists saying?
"I would characterize a shutdown as just the kind of political news that the market has demonstrated, over the past year, a willingness to ignore," said Hank Smith, co-chief investment officer at Haverford Trust, which manages $8 billion. He said that "the market is reacting to GDP growth both here and abroad; corporate profits, which are growing by double-digit rates and are healthy; interest rates that remain low despite a gradual uptick; and benign inflation."
Which stocks were in focus?
Chip makers rallied on optimism over the group's upcoming earnings, with Mizuho analyst Vijay Rakesh saying that chip-pricing trends were positive (http://www.marketwatch.com/story/chip-pricing-trends-could-boost-amd-nvidia-and-micron-results-analyst-2018-01-19). Advanced Micro Devices Inc.(AMD) rose 1% while Nvidia Corp.(NVDA) was up 2.5%.
Shares of International Business Machines Corp.(IBM) dropped 4% after the tech company late Thursday reported a fourth-quarter loss (http://www.marketwatch.com/story/ibm-shares-fall-despite-first-revenue-growth-in-5-years-2018-01-18) due to a $5.5 billion one-off charge from the recently-passed tax legislation.
American Express Co.(AXP) fell 1.8%. The credit-card company late Thursday recorded its first quarterly loss (http://www.marketwatch.com/story/amex-reports-first-loss-since-1992-due-to-tax-hit-2018-01-18) in over a quarter-century and said it would suspend its share buy backs in response to a hit from the corporate tax cut.
Both IBM and AmEx are Dow components, and the weakness in the two limited the gain in the blue-chip average. IBM alone cut more than 45 points from the benchmark of blue chips.
Shares of Acorda Therapeutics Inc. (ACOR) rose about 9% on reports that the company was closing in on a buyer (https://seekingalpha.com/news/3323826-potential-suitors-eyeing-acorda-therapeutics-shares-ahead-9-percent-premarket).
Shares of Square Inc. (SQ) rose 5.7% after analysts at Instinet raised their target (http://www.marketwatch.com/story/square-stock-jumps-after-instinet-raises-price-target-to-64-new-street-high-2018-01-19) price to $64, by far the highest among Wall Street analysts tracked by FactSet.
Tobacco companies rose, with Philip Morris International Inc.(PM) up 3.7% and Altria Group(MO) adding 1.6%. Both were among the biggest gainers in the consumer-staples sector, which was itself the top-performing industry of the day, up 1.1%.
Travel retailer Hudson Ltd. (HUD.V) set the terms for its planned initial public offering on Friday (http://www.marketwatch.com/story/travel-retailer-hudson-sets-ipo-terms-to-offer-349-million-shares-at-19-to-21-a-pop-2018-01-19), saying it will offer 34.9 million shares priced at $19 to $21 each.
Home-security company ADT Inc. (ADT) finished down 11.5%, falling below its initial public offering price of $14.
Read:More than half of S&P 500 stocks are up 20% or more since Trump took office (http://www.marketwatch.com/story/more-than-half-of-sp-500-stocks-are-up-20-or-more-since-trump-took-office-2018-01-19)
What's on the economic calendar?
The University of Michigan's consumer-sentiment index fell in January to a reading of 94.4, the worst reading since July (http://www.marketwatch.com/story/consumer-sentiment-falls-to-six-month-low-on-concern-over-prices-uncertain-tax-cut-benefit-2018-01-19).
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
What are other markets doing?
The ICE U.S. Dollar index was up 0.2% at 90.61 (http://www.marketwatch.com/story/dollar-slides-back-to-3-year-low-on-fears-of-government-shutdown-2018-01-19), with currency traders paying more attention to the shutdown issue in Washington.
Crude-oil prices slumped (http://www.marketwatch.com/story/oil-prices-sink-1-head-for-biggest-weekly-loss-since-oct-2018-01-19) 0.6%, posting its biggest weekly loss in a month, after the International Energy Agency said shale producers would help drive U.S. production to levels not seen since the 1970s.
Gold prices (http://www.marketwatch.com/story/gold-bounces-back-as-dollar-falls-on-us-shutdown-concerns-2018-01-19)(GCG.T) settled 0.4% higher at $1,333.10 an ounce, as the dollar pared its losses (http://www.marketwatch.com/story/dollar-slides-back-to-3-year-low-on-fears-of-government-shutdown-2018-01-19).
Asian stock markets closed mainly higher (http://www.marketwatch.com/story/asian-markets-start-off-quiet-with-investors-eyes-on-us-shutdown-2018-01-18), inspiring an upbeat session in Europe as well.
(END) Dow Jones Newswires
January 19, 2018 16:37 ET (21:37 GMT)