S&P 500 continues to new highs amid earnings, economic optimism

The S&P 500 continued its climb to new highs last week, with a wide range of companies advancing.

Hasbro (NASDAQ: HAS) was the index’s Cinderella story, with a 19 percent gain between the closes on Friday, February 3, and Friday, February 10. The surge followed better-than-expected results and sent the toymaker to new record highs. Analysts attributed the move to management shifting away from boy products to dolls based on Walt Disney characters.

Video-game publisher Activision Blizzard (NASDAQ: ATVI) was close behind, rallying 18 percent after earnings beat estimates and a $1 billion stock buyback was announced. The stock also hit a new record high and has now undone a sharp slide in late 2016.

While those companies advanced on the heels of quarterly reports, the broader move in the market seemed to be a rotation back to industrial and transportation stocks. Those are typically preferred by investors during periods of economic optimism and initially rallied after the November election. The return to such cyclical-growth sectors followed strong employment numbers and matched a modest underperformance in many international stocks that outperformed in January.

One global area that remained on fire, however, was China. Investors not only drove the iShares China Large Cap ETF (NYSE ARCA: FXI) to its highest level since October, but additionally snapped up calls (options to buy a security) in hope of further gains.

Energy came back to life, as well, amid signs that Saudi Arabia is honoring promises to cut oil production. That more than offset a surprisingly high inventory report by the U.S. government. There were also several instances of bullish option activity for companies in the sector.

Business-information firm Dun & Bradstreet (NYSE: DNB) was the S&P 500’s laggard last week, cratering 18 percent to a 10-month low after earnings missed forecasts. Akamai Technologies, a provider of Internet services and security, dropped 8 percent after some analysts expressed concerns that capital spending will squeeze margins.

The most noteworthy 52-week low for members in the index was biotech Gilead Sciences (NASDAQ: GILD), which dropped to its cheapest price since April 2014 on signs that sales of its key Hepatitis C drugs were slowing.

Overall the S&P 500 rose almost 1 percent in the week, and closed above 2,300 for the first time ever.