Dow and S&P close at new all-time highs, boosted by gains from Netflix and tech stocks

He Dow Jones Industrial Average and S&P 500 posted all-time closing highs on Friday, with the Nasdaq Also in positive territory, as markets were buoyed by a gain-driven jump in Netflix stock and broader gains in technology stocks.

Wall Street’s three major benchmarks also comfortably notched a sixth consecutive weekly gain, their longest weekly winning streaks since late 2023.

For the week, the S&P 500 gained 0.9%, the Nasdaq Composite advanced 0.8% and the Dow Jones Industrial Average rose 1%.

Netflix shares rose 11.1% to a record close after the streaming giant beat Wall Street estimates for subscriber additions and said it expected continued growth through the end of the year.

Many of the so-called Magnificent Seven tech stocksthat have fueled much of Wall Street’s rally this year, rose.

Apple gained 1.2% after data showed a sharp rise in new iPhone sales in China, while chip heavyweight Nvidia advanced 0.8% after BofA Global Research raised its price target for action. Netflix’s rise boosted the communications services sector 0.9%, making it the biggest gainer among the 11 S&P 500 sectors, while information technology rose 0.5%. “It’s kind of a ‘what I don’t like’ market,” said David Waddell, chief executive of Waddell & Associates, citing positive economic data, disinflation and optimistic U.S. corporate earnings and forecasts.

On Friday, the S&P 500 rose 23.20 points, or 0.40%, to 5,864.67 points, while the Nasdaq Composite rose 115.94 points, or 0.63%, to 18,489.55. The Dow Jones Industrial Average gained 36.86 points, or 0.09%, to 43,275.91.

For the Dow, it was the fifth session in the last six in which it registered a record close. However, its gains on Friday were limited by American Expresswhich lost 3.1% after the credit card company’s quarterly revenue missed estimates.

Financial companies They have had a largely positive earnings season so far. However, the S&P Banks Index fell 0.1%, ending its winning streak at five.

Upbeat earnings from financial companies and broadly positive economic data have helped sustain the bullish movement of the three major indices in recent days.

However, inflated valuations (the S&P 500 trades at nearly 22 times forward earnings), coupled with high expectations for corporate results and potential volatility around the Nov. 5 U.S. presidential election, could leave stocks vulnerable. to a setback.

David Waddell of Waddell & Associates noted, however, that strong corporate earnings could override any political considerations or concerns about inflated valuations.

“We’ve gotten everything we’re going to get from multiple expansion, so I think the path forward depends entirely on earnings,” he said. “We’re valued on pretty good earnings, so it could create a disruption if we don’t get them, but absent a recession, I think the bull is intact.”

Small Cap Stocks have attracted investor buying in recent days, with both the Russell 2000 and S&P Small Cap 600 outperforming major indexes during the week. However, both small-cap indices fell slightly on Friday.

Energy was the only S&P sector that fell. It fell 0.4%, held back by falling oil prices and a 4.7% drop in SLB after it posted earnings below expectations. This dragged oilfield services providers Baker Hughes and Halliburton down 1.3% and 2.1%, respectively.

The energy index was the worst performing sector of the week, falling 2.6%, as US crude oil prices fell 7% due to concerns about Chinese demand and the ongoing conflict in the Middle East.

CVS Health fell 5.2% after replacing CEO Karen Lynch with company veteran David Joyner and withdrawing its 2024 profit forecast.

The news also affected other health insurers, including Cigna and Elevance Health. The latter, which fell 3.1%, closed at its lowest level in almost 15 months.

Volume on US exchanges was 10.62 billion shares, compared to the average of 11.56 billion for the entire session over the last 20 trading days.