Can the S&P 500 notch its 20 record closing high on Friday?
FUTURES CONTRACTS ON THE DOW JONES INDUSTRIAL AVERAGE EDGED HIGHER ON FRIDAY BUT THE BROADER MARKET WAS FACING MUTED TRADE AFTER THE S&P 500 INDEX BOOKED ITS 19TH RECORD OF THE YEAR, POWERED PARTLY BY A REBOUND IN TECHNOLOGY SHARES.
THE MAIN U.S. EQUITY INDEXES ARE ALL HEADED FOR WEEKLY GAINS, WITH INVESTORS FOCUSED FRIDAY ON A READING OF PRODUCER PRICES FOR SIGNS OF PERCOLATING INFLATION.
How are stock benchmarks faring?
On Thursday, the Dow DJIA, +0.17% added 57.31 points, or 0.2%, to finish at 33,503.57, the S&P 500 index SPX, +0.42% rose 17.22 points to reach at a record at 4,097.17, a gain of 0.4%, while the Nasdaq Composite Index COMP, +1.03% finished 140.47 points, or 1%, higher at 13,829.31.
What’s driving the market?
Investors are taking cues from the Federal Reserve this week and pushing equity values near record levels, as the central bank underscores its intention to not remove its easy money policies until the jobs market achieves a full recovery from the COVID pandemic.
Fed Chairman Jerome Powell on Thursday advocated stepping up the rate of vaccinations globally and said that the lack of vaccinations abroad poses a threat for the U.S.’s economic progress.
“Viruses are no respecters of borders, and until the world really is vaccinated we’re all going to be at risk of new mutations,” Powell said at a seminar on the global economy hosted by the Intertional Monetary Fund. “I would look at global vaccination as a risk really…to the progress that we are making.”
A projection of future interest rates by Fed officials implies that the central bank will hold key interest rates near 0% through at least 2023.
Stock buying has reverted to technology stocks this week after a rotation into beaten-down in value stocks that are seen outperforming as the economy rebounds from COVID.
Some analysts said that the market’s moves on Friday could be subject to profit-taking after a healthy weekly run-up. For the week, the S&P 500 is on track for a 1.9% gain, the Dow is headed for a weekly gain of 1.1%, and the Nasdaq was aiming for a 2.6% weekly gain. The S&P 500 and the Dow are headed for their third straight weekly gain.
“We see mixed a market as investors take profits after a series of S&P record highs,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities.
Stock-market investors’ biggest bugaboo is out-of-control inflation. However, minutes from the Fed indicate that officials will continue the Fed’s $120 billion bond-buying program until the economy makes “substantial further progress” toward its goals of maximum employment and sustained, 2% inflation.
Investors may get some insights on price trends in the U.S., with a reading of producer prices for March due at 8:30 a.m. ET and am initial reading of wholesale inventories due at 10 a.m.