By Yasin Ebrahim
Investing.com – The S&P 500 and Dow closed at record highs Friday, on a wave of late-buying in tech and strength in banking stocks as investors look ahead to the start of quarterly earnings season next week.
The S&P 500 rose 0.73%, to close at a record level of 4,127.09, the Dow Jones Industrial Average rose 0.89%, notching 297 points and closing at an all-time high of 33,800.60. The Nasdaq Composite was up 0.51%.
The latest signs of inflation, boosted U.S. bond yields, and briefly exerted pressure on growth sectors like tech. The spike in yields ran out of steam, helping tech claw back losses as the Federal Reserve has persistently downplayed the risk of runway inflation.
"[T]here would be upward pressure on prices [from supply chain bottlenecks] that may be passed onto the consumer ... but we think that the effect would be temporary," Fed Chairman Jerome Powell said at virtual IMF panel discussion on Thursday.
"Our target range for the 10-year Treasury yield is between 1.50% to 2% by year-end," Johan Grahn, the head of ETF Strategy at Allianz Investment Management said Friday in an interview with Investing.com. "These yields are still attractive [relative to many other sovereign bonds], so there is still going to be buying pressure for US Treasuries."
Microsoft (NASDAQ:MSFT), Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN) were higher. Facebook (NASDAQ:FB) was lower.
Amazon.com (NASDAQ:AMZN) rose 2% as the e-commerce giant defeated an attempt to unionize at its Bessemer, Alabama, fulfillment center.
Financials were led higher by regional banking stocks ahead of key quarterly results from major Wall Street banks expected next week.
State Street (NYSE:STT), Zions Bancorporation (NASDAQ:ZION) and Citizens Financial (NYSE:CFG) group were among the top gainers.
JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo & Company (NYSE:WFC) and Goldman Sachs (NYSE:GS) are set to report results next week. The banks are expected to show strong performance from trading and deals activity, with the latter boosted by the special purpose acquisition company, or SPAC, frenzy.
In industrials, Boeing (NYSE:BA) was in the spotlight after the aircraft maker reportedly urged 16 airline customers to ground the company’s 737 Max jets, citing electrical issues. The 737 Max aircraft was re-certified airworthy in November following a months-long grounding after two deadly crashes.
In other news, Tesla (NASDAQ:TSLA) appears to be reaping rewards for its big play on China – following the launch of its Giga Factory in 2019 – as the electric automaker sold 69,280 Shanghai-made Model 3s and Model Ys, according to an industry report.