NEW YORK—Wall Street closed out another winning week with a quiet Friday, as stocks found some stability after sliding the day before.
The S&P 500 edged up by 1.47, or less than 0.1 percent, to 4,536.34 to cap its eighth winning week in the last 10. The Dow Jones Industrial Average added 2.51 points, or less than 0.1 percent, to 35,227.69, its 10th gain in a row. The Nasdaq composite slipped 30.50, or 0.2 percent, to 14,032.81 a day after tumbling to its worst loss in more than four months.
Roper Technologies rallied 3.7 percent for one of the larger gains in the S&P 500 after it reported better profit and revenue for the spring than analysts expected. The company, which looks to dominate niche tech markets, also raised its financial forecasts for the full year.
The earnings reporting season is gaining momentum, and a majority of companies are reporting better results than expected. They’re doing so by a bit less than usual, though, according to FactSet.
On the losing side of Wall Street was American Express, which fell 3.9 percent. It reported stronger profit for the spring than expected, but its revenue fell short of forecasts.
Comerica swung from an initial gain to a loss of 4.1 percent after reporting stronger profit and revenue for the spring than analysts expected. The regional bank also reported a decline in average customer deposits, though it said the levels stabilized in the second half of the quarter. Deposits have been under heavy scrutiny since several banks failed in March after customers suddenly yanked out their cash.
The stock market has generally been on a tear this year as the economy has defied predictions for a recession. It’s so far powered through much higher interest rates meant to bring down inflation, and the hope is that it may outlast the Federal Reserve’s rate-hike campaign.
The Fed is widely expected to raise its federal funds rate on Wednesday to its highest level since 2001. But the hope is that will be the final increase of the cycle because inflation has been cooling since last summer. The federal funds rate started last year at virtually zero.
To be sure, the 18.1 percent jump for the S&P 500 this year also has critics saying the rally has come too far, too fast. The risk of recession remains because inflation and interest rates remain high.
When Fed Chair Jerome Powell speaks on Wednesday after the central bank’s decision on rates, economists at Deutsche Bank say he “is likely to emphasize that further evidence is needed to have confidence inflation will be tamed.”
Besides the Fed meeting, next week will also feature earnings reports from three of the “Magnificent Seven” companies behind the majority of the S&P 500’s gains this year. Alphabet, Meta Platforms and Microsoft will report their earnings, and expectations are high after they all soared more than 35 percent so far this year.
Another one of the seven, Tesla, slumped sharply on Thursday despite reporting stronger profit and revenue than expected on fears about upcoming growth. It helped drag the S&P 500 to a loss and the Nasdaq composite to a drop of 2.1 percent.
The top stocks have become so big and their movements have become so influential over the market that Nasdaq is rebalancing its Nasdaq 100 index before trading begins Monday, to lessen the impact some stocks have on the overall index.
The seven stocks, which also include Amazon, Apple and Nvidia, are collectively trading with stock prices that are 44 times higher than their earnings per share over the last 12 months, according to Savita Subramanian, equity strategist at Bank of America.
That’s an expensive level compared with history, but the other stocks in the S&P 500 are trading at a more reasonable-looking 17 times earnings. The stock market’s gains have broadened out a bit recently, and Subramanian said in a BofA Global Research report that she expects that to continue.
In the bond market, Treasury yields were mixed.
The 10-year Treasury yield fell to 3.83 percent from 3.86 percent late Thursday. It helps set rates for mortgages and other important loans.
The two-year Treasury yield, which moves more on expectations for the Fed, ticked up to 4.85 percent from 4.84 percent.
In markets abroad, stocks were mixed across Europe and Asia.
Taiwan’s Taiex fell 0.8 percent after TSMC, the world’s biggest manufacturer of computer chips, said it expects its sales to fall 10 percent this year as demand wanes. It also said it would not meet a 2024 target for starting production at a factory under construction in Arizona.
