Dow And S&P 500 Climb To New Record Closing Highs - U.S. Commentary

(RTTNews) - Following the mixed performance seen in the previous session, stocks moved modestly higher over the course of the trading day on Friday. With the upward move on the day, the Dow and the S&P 500 reached new record closing highs.

The major averages all finished the day in positive territory. The Dow rose 64.86 points or 0.3 percent to 22,268.34, the Nasdaq climbed 19.38 points or 0.3 percent to 6,448.47 and the S&P 500 edged up 4.61 points or 0.2 percent to 2,500.23.

For the week, the Dow surged up by 2.2 percent, while the S&P 500 and the Nasdaq jumped by 1.6 percent and 1.4 percent, respectively.

The strength on Wall Street came as traders shrugged off some disappointing economic reports, as the data was impacted by Hurricane Harvey.

Before the start of trading, the Commerce Department released a report showing retail sales dipped by 0.2 percent in August after rising by a downwardly revised 0.3 percent in July.

Economists had expected retail sales to inch up by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

The unexpected decrease in retail sales largely reflected a sharp drop in sales by motor vehicle and parts dealers, which plunged by 1.6 percent in August after coming in unchanged in July.

Excluding the slump in auto sales, retail sales rose by 0.2 percent in August after climbing by 0.4 percent in July. Ex-auto sales had been expected to increase by 0.5 percent.

A separate report from the Federal Reserve unexpectedly showed a notable decrease in industrial production in August.

The report said industrial production slumped by 0.9 percent in August after climbing by an upwardly revised 0.4 percent in July. Economists had expected production to inch up by 0.1 percent.

The Fed said Hurricane Harvey is estimated to have reduced the rate of change in total output by roughly three-quarters of a percentage point.

Additionally, a report from the University of Michigan showed concerns about the impact of Hurricanes Harvey and Irma have weighed on consumer sentiment in September.

Traders may have been expressing optimism that the impact of the hurricanes may lead the Federal Reserve to delay an increase in interest rates.

Sector News

Most of the major sectors showed only modest moves on the day, although significant strength emerged among semiconductor stocks. The Philadelphia Semiconductor Index surged up by 1.7 percent to its best closing level since 2000.

Graphics chipmaker Nvidia (NVDA) posted a standout gain after Evercore ISI raised its price target on the company's stock to $250 from $180.

Telecom stocks also saw considerable strength, resulting in a 1.3 percent advance by the NYSE Arca Telecom Index. The index moved higher for the fifth straight day after hitting its lowest closing level in over a year last Friday.

Railroad and trucking stocks also moved notably higher over the course of the session, while some weakness was visible among software stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index advanced by 0.5 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 1.1 percent, the French CAC 40 Index and the German DAX Index both edged down by 0.2 percent.

In the bond market, treasuries showed a lack of direction before closing nearly flat for the second straight session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.202 percent.

Looking Ahead

The Federal Reserve announcement is likely to be in focus next week, with traders looking for clues on the outlook for monetary policy.

House data may also attract attention, as reports on homebuilder confidence, housing starts, and existing home sales are all due to be released next week.