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Wall St. rises, racks up fourth straight week of gains

Published 07/22/2016, 04:27 PM
© Reuters. Traders work on the floor of the NYSE
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By Lewis Krauskopf

(Reuters) - Wall Street rose on Friday, clinching the fourth straight positive week for the stock market, boosted by strength in telecom stalwarts AT&T and Verizon.

A U.S. manufacturing report also came in above expectations, building on upbeat data from earlier in the month.

Gains were limited by weakness in reports from industrial companies including General Electric .

The S&P and Dow have broken to all-time records in the past two weeks for the first time in more than a year amid a better-than-feared corporate earnings season. The S&P closed at another record high on Friday.

“Below it all is just an ongoing trend of better economic reports," said Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "Some of those are earnings reports, but they all line up to the same thing: It looks like growth is quickening.”

The Dow Jones industrial average (DJI) rose 53.62 points, or 0.29 percent, to 18,570.85, the S&P 500 (SPX) gained 9.86 points, or 0.46 percent, to 2,175.03 and the Nasdaq Composite (IXIC) added 26.26 points, or 0.52 percent, to 5,100.16.

The S&P 500 is up more than 6 percent in 2016, shaking off a rough start to the year and global instability, including Britain's recent vote to leave the European Union.

"We’re well past the Brexit fallout and the subsequent rebound," said Peter Kenny, senior market strategist at Global Markets Advisory Group in Berkeley Heights, New Jersey. "We’re seeing oil is fairly well-contained and range-bound. So those two variables are off the table, and they have played a big part in triggering volatility."

All 10 sectors ended higher on Friday, led by utilities (SPLRCU) and telecoms (SPLRCL) - defensive, high-dividend-paying groups that have lifted the market this year.

AT&T (N:T) climbed 1.4 percent after its results. Verizon (N:VZ) rose 1.3 percent. The company is the front-runner for Yahoo's core business, Reuters reported. Yahoo (O:YHOO) closed up 1.4 percent.

GE (N:GE) shares slid 1.6 percent. The U.S. industrial conglomerate reported weak demand for new oil, gas and transportation equipment.

Rival Honeywell (N:HON) fell 2.6 percent after the diversified manufacturer lowered its full-year sales forecast.

Still, second-quarter earnings for S&P 500 companies, which started reporting in earnest this week, are now expected to decline by only 3 percent, less severe than the 4.5 percent drop estimated at the start of the month, according to Thomson Reuters I/B/E/S.

Results from about 40 percent of the S&P 500 are due next week, including reports from tech heavyweights.

Investors will also be watching the Federal Reserve's meeting next week for clues about when the U.S. central bank might next seek to raise interest rates.

About 5.6 billion shares changed hands in U.S. exchanges, below the nearly 7.5 billion daily average over the past 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a 2.01-to-1 ratio; on Nasdaq, a 1.88-to-1 ratio favored advancers.

© Reuters. Traders work on the floor of the NYSE

The S&P 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 98 new highs and 20 new lows.

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