The S&P 500 closed just short of an all-time high Friday as investors welcomed solid company earnings reports and an encouraging update on trade talks between the U.S. and China.
Tech, communications services and financial stocks powered the rally. The index ended within 0.1% of its record set July 26. It also notched its third straight weekly gain.
Strong earnings reports from Intel, Charter Communications and others helped reverse a mixed start.
The S&P 500 rose 12.26 points, or 0.4%, to 3,022.55. The Dow Jones Industrial Average gained 152.53 points, or 0.6%, to 26,958.06. The Nasdaq climbed 57.32 points, or 0.7%, to 8,243.12. The Russell 2000 index of smaller stocks rose 8.53 points, or 0.6%, to 1,558.71.
Earnings reports have mostly exceeded analysts’ expectations. However, many that delivered improved results for the quarter have also issued disappointing profit outlooks.
Of the roughly 40% of the companies in the S&P 500 that have reported so far, 80% of them had results that topped Wall Street’s earnings forecasts, while 64% beat revenue estimates, according to FactSet.
Factoring in the earnings reports that have come in, analysts expect earnings from S&P 500 companies for the third quarter will be down 3.7% from a year ago — slightly better than the 4% drop that analysts were expecting.
As of Friday, some 38 companies in the S&P 500 had issued earnings forecasts for the fourth quarter. Of those, 26 issued negative guidance and 12 positive. That works out to 68% of those companies lowering their guidance, just below the five-year average of 70%, according to FactSet.
The S&P 500 notched gains four out of the past five days, rounding out the week with a three-day winning streak.
Intel jumped 8.1% after raising its profit forecast for the year following a solid third quarter. Fellow chipmakers, also made strong gains.
Charter Communications gained 6.2%, reporting solid financial results. The cable operator made some of the strongest gains among communications companies.
Banks rose as bond yields moved higher. The yield on the 10-year Treasury rose to 1.8% from 1.76% late Thursday.
Consumer product makers, utilities and real estate companies lagged the market.
Amazon fell 1.1% after releasing disappointing third-quarter profits and a weak sales forecast for the end of the year.
A robust mix of earnings, economic indicators and an interest rate decision from the Fed should keep investors busy next week, and could determine whether the S&P 500 sets a record.
Alphabet, Google’s parent company, reports on Monday; General Motors, and drugmakers Merck and Pfizer on Tuesday; Apple and Facebook on Wednesday; and Exxon on Friday.
Beyond earnings, the Federal Reserve issues its latest interest rate policy statement Wednesday afternoon, while the government will release its latest monthly reports on hiring and consumer confidence.
Benchmark crude oil rose 43 cents to settle at $56.66 a barrel. Brent crude oil, the international standard, gained 35 cents to close at $62.02 a barrel. Wholesale gasoline rose 1 cent to $1.67 per gallon. Heating oil fell 1 cent to $1.98 per gallon. Natural gas slid 1 cent to $2.46 per 1,000 cubic feet.
Gold rose 60 cents to $1,499.50 per ounce, silver rose 12 cents to $17.86 per ounce and copper added a penny to $2.67 per pound.
The dollar fell to 108.68 Japanese yen from 108.62 yen on Thursday. The euro weakened to $1.1080 from $1.1108.