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Canada’s main stock index ended modestly higher on Friday as technology and energy shares gained ground, with the market adding to gains this week that have lifted the index to a 20-month high. The S&P 500, however, ended a five-session streak of record highs, with Intel slumping after a bleak revenue forecast, while U.S. economic data showed inflation moderating.

The S&P/TSX composite index ended up 23.74 points, or 0.1%, at 21,125.28, its highest closing level since May 2022. For the week, the index was up 1.0%.

“Not unlike the U.S., certainly technology and information services are driving things,” said Lorne Steinberg, president, Lorne Steinberg Wealth Management Inc. “That seems to be the theme of the world ... one of the only sectors that really has that strong growth.”

Technology rallied 0.8% in Toronto and energy was up 0.4%. The latter was helped by higher oil prices, with crude futures settling 0.8% higher at US$78.01 a barrel, as well as gains for pipeline companies, which tend to pay high dividends.

The move in pipelines is down to “the perception that even if interest rates don’t go down quickly they will probably be cut at some point in time,” Steinberg said.

The materials group, which includes precious and base metals miners and fertilizer companies, was one of the laggards, falling 0.5% as the price of gold edged lower.

Even as the S&P 500 and Nasdaq ended the session lower, all three major indexes recorded their third straight weekly gain and their 12th weekly advance out of 13.

A U.S. Commerce Department report showed the personal consumption expenditure index - the Federal Reserve’s preferred inflation gauge - rose moderately in December. This kept the annual increase in inflation below 3% for a third-straight month and bolstered the case for rate cuts this year.

On Thursday, data showed a strong fourth-quarter U.S. economic growth reading.

“These are good numbers,” said Peter Cardillo, Chief Market Economist at Spartan Capital Securities in New York. “Taken with yesterday’s GDP numbers, this report strengthens the possibility of a soft landing, which continues to gain traction.”

Despite the fresh data showing progress on the inflation front, U.S. Treasury yields rose on Friday on concerns about the growing supply of government debt.

The U.S. Treasury Department is likely to announce next week one more round of increases in auction sizes when it details the government’s borrowing needs for the coming quarter.

The Treasury faces higher spending needs due in part to higher social security and interest rate costs.

By late afternoon, the U.S. two-year yield was up 4 basis points and the Canadian equivalent bond yield was up about 8 basis points.

Among stocks, Intel tumbled 11.9% to a six-week low after it gave a revenue forecast that badly missed estimates as it plays catch-up in the AI race while also dealing with a weak PC market.

Chip manufacturing tools maker KLA Corp dropped 6.6% following its disappointing third-quarter revenue forecast.

The Philadelphia SE Semiconductor index fell 2.9%, down for a second day after closing at a record high on Wednesday.

The S&P 500 declined 0.07% to end the session at 4,890.97 points.

The Nasdaq declined 0.36% to 15,455.36 points, while Dow Jones Industrial Average rose 0.16% to 38,109.43 points.

For the week, the S&P 500 added 1.06%, the Dow gained 0.65% and the Nasdaq advanced 0.94%.

The S&P 500 in recent sessions returned to record highs for the first time in two years, extending a rally driven by optimism about the economy and lower interest rates, as well as bets on artificial intelligence.

Of the S&P 500 companies that have reported earnings so far, 78.2% have surpassed expectations, LSEG data showed, compared with a long-term average beat rate of 67%.

Tesla recovered 0.3%, a day after the electric car maker slid 12% following a warning of slower growth in 2024.

American Express jumped 7.1% and hit a record high after the credit card firm forecast a higher-than-expected annual profit. Visa declined 1.7% after the world’s largest payments processor’s tepid current-quarter revenue growth forecast.

Apple fell 1% ahead of its quarterly report next Thursday. The iPhone maker and Intel were among the stocks weighing most on the S&P 500.

Colgate-Palmolive rose 2% after the toothpaste maker posted upbeat fourth-quarter results.

Volume on U.S. exchanges was relatively light, with 9.6 billion shares traded, compared to an average of 11.6 billion shares over the previous 20 sessions.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.2-to-one ratio.

The S&P 500 posted 36 new highs and 1 new lows; the Nasdaq recorded 93 new highs and 77 new lows.

Reuters, Globe staff

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