Stock market today: Wall Street ends its seventh straight week with a quiet end | National News

NEW YORK (`) — Wall Street experienced mixed trading Friday, bringing a quiet end to another turbulent week.

The S&P 500 ended the day almost flat, down 0.36, or less than 0.1%, at 4,719.19. But it is still within 1.6% of its all-time highs reached early last year and closed with a gain for the seventh straight week, marking the longest such winning streak in six years.

The Dow Jones Industrial Average, which tracks a smaller portion of the U.S. stock market, rose 56.81 points, or 0.2%, to 37,305.16, setting a record for the third straight day. The Nasdaq Composite rose 52.36, or 0.4%, to 14,813.92.

Costco contributed to market leadership with an increase of 4.4%. The company reported better results than analysts expected for its latest quarter and said it would give its shareholders $6.7 billion in the form of a special $15 dividend. This helped offset Lennar's 3.6% decline. The homebuilder reported a higher profit than analysts expected for the latest quarter, but also gave a forecast for profitability in the current quarter that fell short of analysts' estimates.

Stock prices across the board rose sharply this week after the Federal Reserve appeared to act on hopes that had been driving Wall Street higher since Halloween. Fed Chairman Jerome Powell did not forcefully push back at a news conference on Wednesday on traders' expectations that inflation has cooled enough for the central bank to cut interest rates after raising them sharply since early last year .

The S&P 500 has risen about 15% since late October as hopes of such a turning point grow. Lower interest rates not only increase prices for all types of investments, but also reduce pressure on the economy and the financial system.

Hopes of multiple rate cuts by the Fed in 2024 have caused Treasury yields to collapse in the bond market, which in turn eases pressure on the stock market.

The 10-year yield fell further on Friday. It fell to 3.91% from 3.92% late Thursday. In October it was over 5%, reaching its highest level since 2007.

With inflation below its peak, Bank of America predicts 152 interest rate cuts by central banks worldwide in 2024. That would be the first year since 2020 that rate cuts outpaced rate hikes.

Of course, some more cautious investors say the markets have outdone themselves in their exuberance. The big moves appear to be a result of the Federal Reserve succeeding in a task that not long ago was considered nearly impossible.

The Fed's goal was to slow the economy and reduce the price of investments through high interest rates enough to control inflation. Then it has to release the brakes at exactly the right time. If we wait too long, the economy could fall into a painful recession. If it happens too soon, inflation could accelerate again and lead to misery for everyone.

That's a lot of ifs. Additionally, many critics say the number of rate cuts traders expect in 2024 does not appear likely unless the U.S. economy falls into recession.

Given the huge rallies so far, “markets are betting everything on the infallible Fed,” strategist Michael Hartnett wrote in a BofA Global Research report.

These rallies could also pose a threat to the futures that investors are betting on. Lower Treasury yields and higher stock prices can encourage businesses and households to spend more, which keeps the economy strong but can also put upward pressure on inflation.

A preliminary report on Friday suggested U.S. business activity growth may be higher. It cited “easier financial conditions,” which is another way of describing market movements that could encourage businesses and people to spend more.

“Easy financial conditions have helped boost demand, business activity and employment in the services sector, and have also helped drive up future output expectations,” said Chris Williamson, chief economist at S&P Global Market Intelligence.

Williamson also said a measure of pressure on inflation “remains persistent but at a level that suggests” inflation at the consumer level is only slightly above 2%. The Fed's goal is to keep inflation at around 2% while maximizing the labor market.

In overseas stock markets, Hong Kong's Hang Seng index rose 2.4%, with shares of property developers rising after some Chinese cities eased purchasing restrictions. The Hong Kong market has been one of the worst in the world this year due to concerns about property developers and the overall health of China's economy.

Most other markets around the world were strong in 2023 on hopes for a cooling of inflation and expectations of interest rate cuts.

` business reporter Elaine Kurtenbach contributed.

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