The S&P 500 etched a new record for the fourth straight week amid a continued onslaught of positive news.
The index rose 0.65 percent between Friday, February 24, and Friday, March 3. It moved as high as 2401 in the middle of the week after President Trump delivered a speech in favor of tax cuts and infrastructure spending. Financials led the charge as Federal Reserve officials suggested they’ll hike interest rates at next week’s meeting.
“The U.S. economy has exhibited remarkable resilience,” Chair Janet Yellen told an audience in Chicago on Friday afternoon. “The process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016.”1
Her comments echoed remarks by other policymakers and came after consumer confidence unexpectedly surged to a 16-year high, and the number of Americans seeking unemployment benefits slid to their lowest level since 1973. Manufacturing and service-provider indexes from the Institute for Supply Management also showed quicker expansion than economists anticipated.
Health care was the second-best sector amid hopes for easier drug approvals. Housing-related companies also outperformed after the Case-Shiller Index of home prices rose more than forecast and pending sales indicated demand is outstripping supply.
The agenda is slower this this week but still includes hot ticket items like ADP’s private-sector payrolls report on Wednesday, a European Central Bank meeting Thursday, and non-farm payrolls Friday.
Albemarle (NYSE: ALB), a chemical maker that reported better-than-expected earnings and revenue, rose 13 percent last week, making it the S&P 500’s best performer. Micron (NASDAQ: MU) rallied 10 percent after strong guidance and a Goldman Sachs upgrade suggested prices are on the rise for its memory chips. Monster Beverage (NASDAQ: MNST) climbed a similar amount after revenue surprised to the upside.
Retailer Target (NYSE: TGT) was among the index’s weakest members after profit missed estimates and management said it will cut prices to regain customers. Other consumer-related names like Mattel (NASDAQ: MAT), Kimco (NYSE: KIM), and Macerich (NYSE: MAC) also probed new 52-week lows. Debt-laden telecom Frontier Communications (NASDAQ: FTR) was the worst performer overall, cratering more than 15 percent to levels not seen in over 25 years after results missed estimates.
Last week was also noteworthy because the Dow Jones Industrial Average pushed above 21,000 for the first time ever.
In summary: Stocks have had an incredibly strong run but so far few headwinds have appeared.
1. Janet Yellen: Speech at the Executives’ Club of Chicago, Illinois. 3/3/17