Wall Street ended a week of milestones with a few more Friday. In Toronto, it was another day of pot stock mania.
The benchmark S&P 500 index closed at an all-time high, just two days after the current bull market in U.S. stocks became the longest in history. The Nasdaq composite and the Russell 2000 indexes also ended the day at all-time highs.
Technology companies, the best-performing sector in the market this year, accounted for much of the gains. The price of oil snapped a seven-week losing streak, finishing this week about 5 per cent higher.
The rally capped another solid week for the stock market, which has been riding a wave of strong corporate earnings even amid uncertainty over simmering global trade tensions.
“It appears that the market is really focusing on fundamentals,” said Rob Eschweiler, global investment specialist at J.P. Morgan Private Bank. “We’re at the very tail end of earnings season and there’s no other way to characterize the earnings season other than ‘spectacular.“’
The S&P 500 index gained 17.71 points, or 0.6 per cent, to 2,874.69. It has now finished with a weekly gain in seven out of the last eight weeks.
The Dow Jones Industrial Average rose 133.37 points, or 0.5 per cent, to 25,790.35. The 30-company average is still below the high it set in January.
The Nasdaq added 67.52 points, or 0.9 per cent, to 7,945.98. Its previous all-time high was set on July 25. The Russell 2000 index of smaller-company stocks picked up 8.62 points, or 0.5 per cent, to 1,725.67. It also notched back-to-back all-time highs earlier this week.
Since entering a correction in early February, which is defined as a loss of 10 per cent or more from a peak, the S&P 500 has mostly crawled higher, with some bumps along the way, thanks to a still-recovering economy and a boom in corporate profits.
More recently, stocks have been buffeted by concerns about mounting trade tensions this spring and summer, particularly with China. But investors have increasingly focused on strong corporate earnings growth.
Earnings at S&P 500 companies have surged 23 per cent in the first half of this year versus the same period a year earlier, according to S&P Global Market Intelligence.
The string of all-time highs for the indexes underscore the resilience of the U.S. stock market’s bull run, which began in 2009 and became the longest on record Wednesday.
Stocks were trading higher from the get-go Friday, then climbed further after investors weighed new remarks from Federal Reserve Chairman Jerome Powell.
Speaking at an annual conference of central bankers in Jackson Hole, Wyoming, Powell struck a measured tone about the economy and said the Fed plans to stick with a gradual pace of rate hikes.
Powell said the central bank recognizes the need to strike a careful balance between its mandates of maximizing employment and keeping price increases stable. And he noted that a gradual approach to rate hikes is the best way to navigate between the risks of raising rates too fast and “needlessly shortening the expansion” and moving too slowly and risking an overheated economy.
Powell added that while annual inflation has risen to near the Fed’s 2 per cent target rate, it doesn’t seem likely to accelerate above that point. That suggests that Powell doesn’t foresee a need for the Fed to step up its rate hikes. Next month, the Fed is widely expected to resume raising rates.
“The equity markets wanted to hear that slow-and-steady is the path, and I didn’t hear anything to the contrary,” Eschweiler said.
Investors continued to bid up technology sector stocks Friday. Video game publisher Activision Blizzard rose 4.1 per cent to $74.09.
Shares in materials sector companies posted solid gains. Albemarle picked up 2.4 per cent to $96.
Software maker Autodesk surged 15.3 per cent to $157.20 after issuing a better-than-expected quarterly report and strong forecasts.
Some retailers fell after reporting disappointing earnings or outlooks.
Gap slumped 8.6 per cent to $29.65 after the clothing chain said sales at Gap stores fell in the second quarter compared to a year earlier. Hibbett Sports sank 30.2 per cent to $20.53 after the retailer cut its fiscal year profit and sales forecasts following a weak second quarter.
Benchmark U.S. crude gained 1.3 per cent to settle at $68.72 per barrel in New York. It snapped a seven-week losing streak, finishing this week about 5 per cent higher. Brent crude, used to price international oils, rose 1.5 per cent to close at $75.82 per barrel.
The latest increase in oil prices helped boost energy stocks. Concho Resources gained 2.7 per cent to $137.99.
Bond prices rose. The yield on the 10-year Treasury fell to 2.81 per cent from 2.82 per cent late Thursday.
The Toronto Stock Exchange’s S&P/TSX rose 29.26 points, or 0.18 percent, to 16,356.05. Marijuana stocks jumped in Toronto after BNN Bloomberg TV reported Diageo PLC is holding discussions with at least three Canadian cannabis producers about a possible deal.
Leading the index were Aphria Inc , up 22.7 percent, Ivanhoe Mines Ltd , up 13.7 percent, and Pretium Resources Inc , higher by 9 percent.
Lagging shares were Martinrea International Inc , down 4.0 percent, Parkland Fuel Corp, down 2.2 percent, and Nexgen Energy Ltd, lower by 2.0 percent.
On the TSX 121 issues advanced and 118 declined as a 1-to-1 ratio favored advancers. There were 5 new highs and 2 new lows, with total volume of 211.4 million shares.
The most heavily traded shares by volume were Aurora Cannabis Inc , Aphria Inc and Canopy Growth Corp.
The TSX’s energy group rose 0.87 points, or 0.43 percent, while the financials sector slipped 0.16 points, or 0.05 percent.
The TSX is up 0.9 percent for the year.
The Associated Press, Reuters, Bloomberg News