S&P 500 Finishes Higher for Fifth Straight Week
Cava’s stock fell Friday, but its first-day pop on Thursday was a jolt for the IPO market. Photo: Richard B. Levine/Zuma Press By Ryan Dezember June 16, 2023 4:27 pm ET Major stock indexes backed off the 2023 highs they hit on Thursday but ended the week higher, lifted by the Federal Reserve’s decision to pause its interest-rate increases as well as data showing U.S. consumer confidence and spending is picking up. The S&P 500 notched its fifth consecutive weekly gain, the longest such streak since autumn 2021, before the Fed began raising borrowing costs to cool inflation. The tech-loaded Nasdaq Composite had its eighth consecutive weekly gain, which hasn’t happened since early 2019, according to Dow Jones Market Data. On Friday, the S&P 500 shed 0.4%. A decline in tech stocks out
Cava’s stock fell Friday, but its first-day pop on Thursday was a jolt for the IPO market.
Photo: Richard B. Levine/Zuma Press
Major stock indexes backed off the 2023 highs they hit on Thursday but ended the week higher, lifted by the Federal Reserve’s decision to pause its interest-rate increases as well as data showing U.S. consumer confidence and spending is picking up.
The S&P 500 notched its fifth consecutive weekly gain, the longest such streak since autumn 2021, before the Fed began raising borrowing costs to cool inflation. The tech-loaded Nasdaq Composite had its eighth consecutive weekly gain, which hasn’t happened since early 2019, according to Dow Jones Market Data.
On Friday, the S&P 500 shed 0.4%. A decline in tech stocks outweighed gains in utilities, materials and consumer staples. The Dow Jones Industrial Average fell 0.3%, or about 109 points. The Nasdaq Composite lost 0.7%.
Treasury yields edged higher as well. The 10-year yield rose to 3.768%, from 3.727% on Thursday.
U.S. stock and bond markets are closed Monday for the Juneteenth holiday.
Investors have braced for recession for more than a year while the Fed raised interest rates at the fastest pace since the early 1980s, but are warming to the possibility that inflation can be tamed without tanking the economy. The central bank held borrowing costs steady on Wednesday but suggested that it would continue its inflation fight with two more rate increases this year.
“The rally is broadening out into areas of the economy beyond just technology,” said Tony Roth, chief investment officer at Wilmington Trust. “That’s an indicator that the market thinks we’re avoiding any meaningful economic slowdown.”
Data this week showed U.S. consumer confidence and spending have risen despite the sharp climb in borrowing costs. On Friday, the University of Michigan’s consumer-confidence survey registered 63.9 for June, up from 59.2 in May and above Wall Street’s expectation of 60. On Thursday, Commerce Department data showed retail spending rose 0.3% in May, compared with April. Economists surveyed by The Wall Street Journal expected a 0.2% decline.
Cruise operators and airlines were among the top-performing stocks in the S&P 500 during the week. Carnival led the index with a gain of 21%, while rival Norwegian Cruise Line Holdings added 11%. Southwest Airlines gained 12%, and Delta Air Lines climbed 8.9%. Cosmetics maker Estée Lauder
Shares of Mediterranean restaurant chain Cava Group surged 99% in their market debut Thursday on the New York Stock Exchange. Though the stock dropped 13% Friday, the first-day pop was a jolt for the IPO market, which has been unusually slow for the past 18 months.
Rival exchange operator Nasdaq was one of the week’s biggest losers. Its shares ended the week 11% lower after it said it would pay $10.5 billion for a maker of bank software.
The recovery in stocks this year has been led by a few giant technology firms, like , the first chip maker to attain a trillion-dollar market value, and Facebook
Randy Watsek, a New York financial adviser with Birch Lane Group of Raymond James, said investors should consider the other side: Gains concentrated in a few stocks means there are bargains to be found. He said he has been hunting for companies with strong cash flow and light debt burdens.
“The market is not going gangbusters, even though it looks that way,” he said. “If you look broadly you can find companies trading at reasonable valuations.”
Overseas markets were mostly higher on Friday. Hong Kong’s Hang Seng Index rose 1.1% and the Shanghai Composite increased 0.6%, boosted by expectations for a major stimulus from Beijing. The Stoxx Europe 600 index added 0.5%.
Japan’s Nikkei rose 0.7% to close at a new 33-year high.
Write to Ryan Dezember at [email protected]
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