The S&P 500 index reached highs in intraday trading on Friday, as US stocks shook off earlier concerns regarding a slow second-quarter domestic growth, however the Dow Jones Industrials remained under pressure.
The S&P 500 hit a record for the seventh time this month as gains in the tech giants Alphabet (NASDAQ:GOOGL) and Amazon.com (NASDAQ:AMZN) more than offset the losses in energy shares. The index jumped as much as 0.3 percent, touching an all-time high of 2,177.09. Moreover, the S&P 500 concluded its fifth straight month of gains.
Shares of Google parent Alphabet climbed 3.33 percent a day after the tech company posted strong quarterly revenue growth, while e-commerce leader Amazon tapped a record high after releasing an upbeat forecast for the current quarter.
Alphabet contributed most of the gains on the Nasdaq and the S&P 500.
However, the Dow Jones Industrial Average was weighed down by a 1.48 percent decline in McDonald’s (NYSE:MCD) and a 1.39 percent drop in Exxon Mobil (NYSE:XOM), which posted a lower-than-expected quarterly profit. The stock was the highest percentage loser on that index.
The blue chip index is seen to post weekly losses, but still end the month 2.8 percent higher.
Market analysts said that a rebound in oil prices might be fueling a slight gain in equities, however, that support disappeared with oil prices falling flat at $41.14 a barrel.
"None of the data that came out earlier were good and there wasn't any company-specific news that would lift the markets, instead it's the tractor beam of oil that is pushing equities higher," a senior analyst stated.
A weaker economic data weighed on sentiment earlier. The US economy grew at a slower pace in the second quarter. According to the Commerce Department, the dull 1.2 percent annual growth rate was due to a massive decline in business investment. On the other hand, first-quarter growth was also cut to a 0.8 percent annual rate from the earlier forecast of a 1.1 percent.
For the week, the Dow fell 0.75 percent, the S&P 500 dove 0.07 percent and the NASDAQ gained 1.2 percent. In July, the Dow climbed 2.8 percent, the S&P added 3.6 percent and the Nasdaq jumped 6.6 percent.
Slow Economic Growth
The US economy grew at a slower pace than expected during the second quarter. Gross domestic product rose at a 1.2 percent annual rate after increasing by a downwardly revised 0.8 percent pace in the first quarter. The economy was reported to have grown at a 1.1 percent pace in the first quarter. This is the initial forecast on the second-quarter GDP, but economists had predicted growth increasing at a 2.6 percent rate.
For the first time in almost five years, inventory investment plunged. Once the burden of a downward inventory adjustment is thought-out, the underlying pace of growth seems healthier than the headline GDP number.
Excluding inventories, the economy jumped at a 2.4 percent rate. Consumer spending, which accounts for over two-thirds of US economic activity, increased at a 4.2 percent rate, marking the fastest improvement since the fourth quarter of 2014.