Wall Street’s record-breaking rally continued Friday as the Dow Jones industrial average and Standard & Poor’s 500 index both pushed up at record highs. All the major stock indexes managed to finish the week ahead of where they started at the beginning of the week.
The S&P 500 (SPX) managed to gain 3.39 points, or 0.2%, to close at 1,962.87, bringing its win streak to six days and notching a record close for the third day in a row and for the 22nd time hit a record high in this year.
The Nasdaq composite index rose 8.71 points, or 0.2%, to 4368.04 reaching its strongest finish in 14 years.
The Dow Jones industrial average rose 25.62 points, or 0.2%, to 16,947.08, topping its previous record close of 16,945.92 set on June 10.
US government bonds declined to a fraction to end the week, with the year for the 10 year Treasury note ending at 2.61%. This was down 0.01% from Thursday.
“Well, the trend is your friend and with the Fed reiterating their dovish stance the follow through has propelled global equities to new highs. However, lingering in the background is steadily rising oil prices which will impact growth in time and markets will soon start to price this in,” said Mike McCudden, head of derivatives at stockbroker Interactive Investor, in a note.
“The supportive monetary policy of the Federal Reserve which was more dovish than the market had been anticipating has pulled the dollar lower and pushed equity markets higher,” said Richard Perry, market analyst at Hantec Markets, in a note.
“However, this positivity is countered by the tensions in Iraq,” which led President Obama on Thursday to order up to 300 members of U.S. special-operations forces to that country, Perry said. “Upside is likely to continue to be slow going whilst this remains the case,” the analyst said.
The Federal Open Market Committee (FOMC) release a statement saying interest rates didn’t change and remained at 0.00% to 0.25% at the end of their two-day meeting. As part of the policy statement made, FOMC said the following: “It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.” Low interest rates help make stocks look attractive compared to other investment vehicles.
In other markets, Asian stocks finished mixed , and European equities ended marginally lower. Gold futures rose, trading above the key level of $1,300, and the U.S. oil benchmark finished at a nine-month high.
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