Stocks Notch Weekly Gains; Major Indexes Sit Near Records

The S&P 500 snapped a five-day streak of fresh records, dragged lower by technology shares.

The benchmark index fell 0.1%, while the Dow industrials edged up 0.2%, or 60 points, to hit a new high. The tech-heavy Nasdaq Composite declined 0.4%. All three indexes finished the week higher.

A rally in big tech stocks has helped propel the S&P 500 to new highs. A belief that the Federal Reserve has successfully slowed inflation without inducing a sharp economic slowdown has helped fuel the trade. The central bank’s preferred inflation gauge showed Friday that price pressures remained mostly subdued in December. The personal-consumption expenditures index rose 0.2% from the previous month.

Some of the market momentum faltered after chip maker Intel gave a tepid outlook for sales in its current quarter. Its shares dropped 12%, their largest percent decrease since July 2020. The decline dragged down other chip makers. Advanced Micro Devices, Nvidia and Micron Technology all finished lower.

Offsetting the decline in tech shares, American Express shares added 7.1% after the credit-card company’s forecasts for 2024 came in ahead of Wall Street expectations. Colgate-Palmolive shares gained 2% after the maker of dental, personal care and pet food products posted better-than-expected fourth-quarter earnings.

“Earnings have been a mixed bag, but that conflicts with the economic data,” said Gina Bolvin, president of Bolvin Wealth Management Group. “This economy continues to defy skeptics.”

Investors are playing close attention to economic data that will shed light on whether consumer spending—the backbone of the U.S. economy—will continue to stay strong. Consumer spending rose 0.7% in December from the previous month, data released Friday showed.

The Fed is expected to keep interest rates steady when it meets next week, but investors will parse comments from Fed Chairman Jerome Powell for indications of future cuts, which could boost the economy. Data on the number of jobs added this month are due next Friday.

“Next week is just so data dense. Going into the weekend it’s not surprising to me that people are being cautious,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.

In bond markets, the yield on the benchmark 10-year Treasury note edged up to 4.159% from 4.131% Thursday. Yields rise when prices fall.

Overseas, the pan-continental Stoxx Europe 600 climbed 1.1%, led by gains in luxury-goods companies.

LVMH Moët Hennessy Louis Vuitton—the world’s largest luxury-goods company—reported above-forecast sales for 2023, despite a slowdown in growth. The owner of the Louis Vuitton, Dior and Hennessy cognac brands posted sales equivalent to about $93 billion, up 13% on an organic basis from 2022.

Shares of LVMH jumped more than 12%. Other European luxury fashion and beverage stocks also surged.

Some Chinese biotech stocks dropped after U.S. politicians proposed a law that could restrict their access to the American market. That weighed on Hong Kong’s Hang Seng Index, which fell 1.6%.

Write to Caitlin Ostroff at [email protected]