Finance News

Dow closes on a file for the third consecutive optimistic week

All major averages ended the week in gains for three straight weeks, with the Dow Jones Industrial Average climbing to a record high.

The Dow climbed nearly 74 points, or 0.2%, to 35,677.02, its first record close since August 16. The S&P 500 fell 0.1% to 4,544.90 per day after the benchmark closed on a record close. The Nasdaq Composite lost 0.8% to 15,090.20.

During the month, the S&P and the Dow are up more than 5%, while the Nasdaq is up 4.4%.

The Dow received a boost on Thursday as investors switched from technology stocks to blue chips. American Express led the index up 5.4% on the back of a strong earnings report.

Intel and Snap dragged the Nasdaq down Thursday after both companies reported disappointing earnings. Intel shares fell 11.6% after reporting weaker-than-expected sales and a loss of revenue blamed on industry-wide chip shortages. Snap said its advertising business had declined due to Apple's privacy changes. Snap shares were down 26.5%.

Social media stocks also fell, with Facebook and Twitter falling 5 and 4.8%, respectively.

However, several tech stocks rose to all-time highs. Tesla stock extended its rally, rising 1.7% after hitting a new intraday high that morning. The electric vehicle maker's shares also closed at a record high: $ 909.68. Tesla closed 3.2% higher on Thursday after reporting record earnings and sales and strong margins. Netflix, Ebay and Microsoft also hit new all-time highs during Friday's trading session.

Despite the tech slips, the overall earnings season has been stellar so far, bringing the broader market back to an all-time high after a two-month lull.

Still, things can still seem a bit uncertain to investors looking towards the end of the year due to cost pressures, labor shortages, and management comments on earnings calls and comments from Fed Chairman Jerome Powell and other policy makers – even if the S&P 500 is up 20% for the year, Stephen Kolano, chief investment officer of BNY Mellon Investor Solutions, told CNBC.

"By doing this you see some profit-taking," said Kolano. "First and foremost, investors go to the companies that have been running the fastest, and that's a lot of the technology."

Disappointing results from Intel and IBM earlier this week, as well as restrictive comments from Federal Reserve Chairman Jerome Powell on inflation and monetary tightening have added to market turmoil, but the slight downward movement should at least in the short term, said Cliff Hodge, chief Cornerstone Wealth Investment Officer.

"After rallying 5% for seven green days in a row for the S&P, it makes sense for the market to consolidate," he said. "The year-end lineup looks great given the liquidity momentum in corporate buybacks, but longer term there is still the unresolved valuation headwind, mid-cycle transition and a rebounding Fed that could prove challenging now as we're up again All-time highs. "

Strong job data added to the positive market sentiment in the previous session. Initial jobless claims fell to a new pandemic low of 290,000 last week, the Labor Department reported Thursday – 6,000 fewer than the previous week and less than the 300,000 expected by economists polled by Dow Jones.

One of the concerns of investors during the recent market troubles was a real estate crisis in China. However, investors got good news on this front overnight as China's Evergrande reportedly paid a key interest payment due to overseas bondholders, averting a default for the property developer.

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