© Reuters. FILE PHOTO: A Wall Street sign is seen outside the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2021. REUTERS/Andrew Kelly/File Photo
By Stephen Culp
NEW YORK (Reuters) – Wall Street advanced near the close of a week of ups and downs on Friday, as U.S. Treasury yields eased and economic data helped investors look past the growing likelihood that the Federal Reserve maintains its restrictive policy for longer than expected.
All three US stock indices were positive, led by the technology-laden Nasdaq, which received a solid boost from market-leading interest rate-sensitive megacaps. US Treasury yields fell on comments from Fed officials that eased fears about inflation and interest rates.
For the week, the indices appear to be on track for gains, with the S&P snapping a three-week losing streak and the Dow enjoying its first weekly gain since late January.
The week also saw the benchmark index break above its 50-day and 200-day moving averages, two closely watched technical levels.
“You have a market that is oversold, that traded at significant support levels and is above the resistance level of the 50”-day moving average, said Robert Pavlik, a senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “It’s an indication that a change is taking place. And a lot of people are suspicious of that, but they don’t want to be left behind.”
Economic data released on Friday showed steady demand for services, with Purchasing Managers’ Indexes (PMIs) from the Supply Management Institute and S&P Global (NYSE:) indicating activity in the sector continues to expand even as commodity prices the supplies are cooled.
“There is nothing to indicate that we are falling off a cliff,” Pavlik added. “The labor market remains very strong and this morning’s data points to a soft landing.”
As of 1:56 p.m. ET, it was up 279.29 points, or 0.85%, at 33,282.86, the S&P 500 gained 51.18 points, or 1.29%, at 4,032.53 and added 189, 80 points, or 1.66%, to 11,652.78.
Among the 11 major sectors of the S&P 500, all but consumer staples were in positive territory, with communication services and consumer discretionary enjoying the largest percentage gains.
Fourth-quarter earnings season is in the home stretch, with all but seven of the companies in the S&P 500 reporting. Results for the quarter have beaten consensus estimates 68% of the time, according to Refinitiv.
Still, overall, analysts believe S&P 500 earnings will have fallen 3.2% in the fourth quarter compared with a year earlier, and expect negative year-over-year numbers for the first two quarters of 2023. This would imply that the The S&P 500 entered a three-quarter earnings slump in the final months of 2022, according to Refinitiv.
Apple Inc (NASDAQ:) jumped 2.9% after Morgan Stanley (NYSE:) said the shares could rise more than 20% this year on a possible hardware subscription.
Broadcom (NASDAQ:) Inc rose 5.5% after the chipmaker forecast second-quarter revenue above analyst estimates as increased AI investments spurred demand for chips.
Among the losers, Costco Wholesale Corp (NASDAQ:) fell 2.8% after its loss of revenue as high inflation dampened consumer demand.
Chipmaker Marvell (NASDAQ:) Technology Inc slid 6.3% on lower quarterly earnings for the company and a disappointing revenue forecast.
Advancing issuances outnumbered declining ones on the New York Stock Exchange by a ratio of 4.63 to 1; on Nasdaq, a 2.33-to-1 ratio favored advancers.
The S&P 500 posted 21 new 52-week highs and two new lows; the Nasdaq Composite posted 73 new highs and 49 new lows.
