Wall Street passes its latest milestone as the S&P 500 closes above 5,000 for the first time

The New York Stock Exchange on June 29, 2022. Julia Nikhinson/Associated Press, file

NEW YORK – More gains for U.S. stocks on Friday gave Wall Street its latest record, milestone and successful week.

The S&P 500 rose 0.6% to end a day above the 5,000 point mark for the first time. It's the 10th record in less than a month for the index, which completed its 14th winning week in the last 15 weeks, continuing a turmoil that began around Halloween.

The Nasdaq Composite rose 1.2%, coming within 0.4% of its own all-time high set in 2021.

The Dow Jones Industrial Average remained a laggard a day after setting its latest record. It fell 54 points, or 0.1%.

Milestones like the S&P 500 closing at 5,000 don't have much significance for a market that's supposed to move based on hard numbers like interest rates, profits and revenue. But they can enliven the spirits of a market that can also be prone to emotional movements.

Wall Street's rally began on hopes that cooling inflation would prompt the Federal Reserve to ease pressure by cutting interest rates. Lately, such cuts appear to be coming later than hoped, as reports continue to point to a remarkably solid economy. However, this strength has in turn boosted corporate earnings expectations and supported stocks.

Cloudflare became the latest company to soar after reporting higher-than-analysts-expected earnings for its latest quarter. The cloud services company rose 19.5% after announcing it had won both its largest new customer and contract renewal ever, despite a macroeconomic environment that “remains difficult to predict.”

Big Tech stocks have been doing most of the heavy lifting in the market for more than a year, in part because of the mania surrounding artificial intelligence technology. Nvidia, Microsoft and Amazon were the three strongest forces, lifting the S&P 500 after each rose at least 1.6%.

They helped offset a 3.6% decline at PepsiCo, which reported weaker sales in its latest quarter than analysts expected. It said growth is slowing as customers return to their pre-pandemic snacking and other behaviors.

Expedia fell 17.8%, although profit also came in higher than expected. The travel company gave guidance for the first three months of 2024 that analysts said suggested slower growth in bookings. The company also announced that a new CEO, Ariane Gorin, will take over in May.

Take-Two Interactive, the publisher of the Grand Theft Auto series and other video games, fell 8.7% after the company reported weaker-than-expected profit. In addition, the earnings forecast for the fiscal year ending at the end of March was lowered.

Overall, the S&P 500 rose 28.70 points to 5,026.61. The Dow fell 54.64 to 38,671.69 and the Nasdaq gained 196.95 to 15,990.66.

The profits of the large companies in the S&P 500 were largely better than expected this reporting season, which is about two-thirds complete. That's usually the case, but even more companies than usual are doing it this time, according to FactSet.

That has helped boost optimism on Wall Street, but critics say it may have gone too far and pushed stocks to too expensive heights.

Traders are flocking to some riskier assets quickly enough that a contrarian move from Bank of America leans more toward “sell now” than “buy,” even if the levels are unconvincing. The measurement measures how much fear and greed is in the market and suggests buying in October when fear reached a compelling peak.

Yields on government bonds rose slightly on the bond market. The yield on the 10-year Treasury note rose to 4.16% from 4.15% late Thursday.

But the moves were much quieter than earlier in the month, when the 10-year yield jumped from 3.85% as traders aggressively pushed through their rate cut forecasts.

It's an encouraging sign that the stock market can continue to reach highs as expectations of an impending rate cut weaken, especially after the market previously seemed to depend entirely on such forecasts.

“A less emotional market is a positive sign, however investors need to combat the complacency that is a natural reaction to such a strong and steady bull run,” said Mark Hackett, head of investment research at Nationwide.

On the stock markets abroad, the indices were mostly slightly in the red. In Asia, several markets were closed for the New Year celebrations. The Nikkei 225 in Tokyo rose 0.1% after hitting a 34-year high earlier in the day.

` writers Matt Ott and Yuri Kageyama contributed.

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