Friday gains put Dow industrials on track for best week since July

U.S. stocks mostly rose in early trading on Friday, with Wall Street extending its recent uptrend and pushing further into record territory, though declines in large-capitalization technology and internet stocks pressured the Nasdaq.

Where are the major benchmarks trading?

The Dow Jones Industrial Average rose 52 points, or 0.2%, to 26,708, hitting an all-time intraday high in early trading that it subsequently retreated from modestly. The S&P 500 gained 4 points to 2,935, a rise of 0.2% that took it to new records of its own. The Nasdaq Composite Index which remains about 1.5% below record levels, fell 15 points to 8,013, a decline of 0.2%.

The S&P 500 is on track for its ninth rise of the past 10 sessions, while the Dow has risen in eight of the past nine. For the week, the Dow is up 2.1% and on track for its biggest weekly percentage gain since July. The S&P is up 1.1%. Both the Dow and the S&P are on track for their second straight weekly gain, as well as their 10th positive week of the past 12. The Nasdaq is flat for the week.

The Dow’s Thursday record was notable as it was the first for the blue-chip average since January. Both the S&P and the Nasdaq have hit multiple records over the past few months, thanks in large part to the outperformance of technology and internet stocks. While to all-time highs on Thursday, this is a sector the average has less exposure to, a factor that has limited its gains until recently, when industrial stocks have started to lead the market.


What’s driving the market?

Markets have been grinding higher in a low-volatility market for several weeks. The gains have largely been supported by improving economic data, which have pointed to strong economic fundamentals, particularly in contrast to other regions, where stocks have been struggling.

On Thursday, gains came as jobless claims dropped to their lowest since November 1969, a sign of an extremely strong labor market. Separately, the Philadelphia Fed manufacturing index jumped more than expected in September, while an Index of Leading Economic Indicators suggested the U.S. economy in the second half of 2018.

In the latest data, a reading on the manufacturing sector rose to 55.6 in September from the previous reading of 54.7. A report on the services sector dipped to 52.9 from 54.8. Both are from IHS Markit.

These signs of economic strength have been enough for investors to ignore repeated signs of escalating tensions between the U.S. and China—among other regions—on trade policy. President Donald Trump has announced nearly $500 billion in tariffs on Chinese goods this week; China retaliated with measures of its own and said it would introduce more if the U.S. tariffs take effect.

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While many investors are concerned that the trade issue could escalate into a full-blown trade war, they have so far been heartened by the fact that the issue hasn’t shown much impact in economic data or corporate results. Furthermore, some market watchers have said that recent developments haven’t been as severe as expected, leaving room for optimism.

South Korean Finance Minister Kim Dong-yeon , though lawmakers in Seoul have threatened to block the deal if Washington imposes new tariffs on Korean autos and auto parts.

What are market analysts saying?

“We don’t have a full-out trade war, and at this point, most people understand the impact of what’s happened so far won’t be too big on margins. And since earnings and revenue growth are as high as they’ve ever been, it’s perfectly fair for stocks to be at records,” said Peter Lazaroff, co-chief investment officer at Plancorp, which has $3.9 billion in assets.

“However, given that valuations are pretty high, the prospect of our getting a pullback should be at the forefront of investors’s minds. That would just be part of a healthy, functioning market, however. Overall markets aren’t euphoric or complacent about the risks out there.”

What stocks are in focus?

Micron Technology Inc.  shares fell 3% a day after it reported strong quarterly results, though . The results could spark broader weakness in the chip space if it leads to concerns that the sector’s sky-high growth . The broad semiconductor sector fell 0.2%.

Among other notable names, Apple Inc.  fell 0.6%, as did Facebook Inc.  and Amazon Inc.  Google-parent Alphabet Inc.  fell 0.8%. All four had an outsize drag on the Nasdaq.

Adobe Systems Inc. from a private-equity firm for $4.75 billion. Shares fell 0.6%.

Shares of Dow component AT&T Inc.  rose 1.8% after UBS .

GTx Inc.  plummeted more than 90% after the company said its therapy intended for postmenopausal women with stress urinary incontinence .

Medtronic PLC  said it would buy Mazor Robotics Ltd. . Shares of Medtronic fell 0.2% while Mazor surged 10%.

Wells Fargo & Co.  late Thursday said it would reduce jobs to address industry trends and changes in customer behavior. Shares were little changed.

Where are other markets trading?

, with shares in Shenzhen on track for their best week since July and Japan’s Nikkei at its highest level since January.

Crude-oil prices  rose 0.6% while gold  was down 0.1%. The U.S. dollar index  inched up by 0.1%.

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