By Devik Jain and Medha Singh
(Reuters) – The hit a record high on Friday, boosted by gains in Nike and bank stocks, while weaker-than-expected inflation data eased worries about a sudden tapering in stimulus by the Federal Reserve.
Nike Inc (NYSE:) surged 13.9% to an all-time high after the sneaker maker forecast fiscal full-year sales ahead of Wall Street estimates, helping the Dow rise 0.69%.
Inflation has spearheaded markets in the past few sessions, with latest personal consumption expenditures (PCE) data showing a measure of underlying inflation rose less than expected in May. Core PCE rose 3.4% year-over-year as expected, above the Fed’s 2% flexible target.
The data is “giving people a breath of fresh air, and that the inflation fears may be a little overblown,” said Thomas Hayes, chairman of Great Hill Capital LLC in New York.
Investors are also girding for probably the biggest trading event of the year, as Russell reconstitutes its indexes which could reflect a wild trading year marked by the pandemic and a “meme” stock craze.
The S&P 500 and the Nasdaq were on track for their best weekly jump in 11 after an agreement on a bipartisan infrastructure deal and reassurances from Fed Chair Jerome Powell calmed nerves following the central bank’s hawkish surprise last week.
“You had this divergence of opinion among Fed members, and what everyone seems to forget is that Chairman Powell is driving the bus and he has the pedal to the metal,” Hayes said.
The S&P banks index jumped 1.2% after the Fed announced big banks have cleared latest stress test and will no longer face pandemic-era restrictions on buying back stock and paying dividends.
Nine of the 11 major S&P sectors rose, with financials, materials and healthcare among the biggest gainers.
Consumer discretionary, which houses some of the mega-cap tech names such as Tesla (NASDAQ:) Inc and Nike, was the top performer.
Graphic: S&P 500 versus – https://fingfx.thomsonreuters.com/gfx/mkt/yzdpxldylpx/spx_yield.PNG
At 11:25 a.m. ET, the was up 235.96 points, or 0.69%, at 34,432.78, and was set for its best weekly performance since mid-March.
The S&P 500 was up 11.77 points, or 0.28%, at 4,278.26 and the was up 2.91 points, or 0.02%, at 14,372.62.
FedEx Corp (NYSE:) dropped 4.5% after the U.S. delivery firm missed 2022 earnings forecast due to hiring difficulties.
CarMax Inc (NYSE:) jumped 6.3% after the used-car retailer topped Wall Street estimates for quarterly revenue, helped by strong demand as more people opted for personal vehicles over public transport due to the COVID-19 pandemic.
Billionaire Richard Branson’s spaceship company Virgin Galactic surged 34.8% after receiving approval from the U.S. aviation safety regulator to fly people to space.
Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new low, while the Nasdaq recorded 92 new highs and five new lows.