Investing.com – The very merry July stock market rally bubbled along Friday with the major averages all setting new highs and the S&P 500 closing above 3,000 for the first time.
The S&P 500 closed up 0.46% after hitting a new high of 3,013.62 . The Dow industrials finished up 0.9% after its second 200-point gain in two days; Friday's gain was 244 points. The blue-chip index hit a new high of 27,333.79. The Nasdaq Composite added 0.6% along with a new high of 8,246.
The rally was fueled by the intense belief the Federal Reserve will cut interest rates at its July 30-31 meeting. Lower rates boost the value of stocks and bonds.
For several weeks, Fed Chairman Jerome Powell has signaled a rate cut is coming. He told Congress twice this week the central bank stands ready to "act as appropriate" to support the economic expansion, now in its 10th year. Stocks have been rising as a result. His concern -- and the Fed's -- has been prompted by slowing business investment, slow wage growth and the Trump Administration's trade policies, particularly its trade battle with China.
Interest rates, in fact, moved slightly lower Friday, with the 10-Year Treasury dropping 0.3% to 2.113%. The yield has fallen more than 20% this year.
Oil prices moved up slightly on Friday, despite skepticism that the current rally may not last. West Texas Intermediate crude futures ended up 1 cent at $60.21 a barrel. Brent Oil Futures settled up 20 cents to $66.72.
The stock rally was largely led by non-tech stocks, especially industrial stocks including Dow (NYSE:DOW), Caterpillar (NYSE:CAT), 3M (NYSE:MMM) and Boeing NYSE:BA).
Chip stocks moved higher, with the Philadelphia Semiconductor Index up 1.9%. Chip giant Intel (NASDAQ:INTC) also was a winner, up 2.7%.
Facebook (NASDAQ:FB) rose 1.8% as The Wall Street Journal reported the Federal Trade Commission has approved a $5 billion fine over its investigation into the social media company's handling of user data. Shares were up another 0.2% after hours.
Pharmaceutical and healthcare stocks were lower, with Johnson & Johnson (NYSE:JNJ) slumping on a report that a federal grand jury is investigating if the company lied about the presence of asbestos in its talcum powder. J&J, Merck (NYSE:MRK) and Pfizer (NYSE:PFE) were the Dow losers.
For the week, the Dow finished up 1.52%, with the S&P 500 up 0.8% and the Nasdaq up 1%. For the year, the S&P 500 is up 20%, the Dow 17.2% and the Nasdaq up 24.3%.
Next week, the second-quarter earnings season ramps up, led by bank and financial stocks. JPMorgan Chase (NYSE:JPM) will report before Tuesday's open.
Winners and Losers in the S&P 500
Trucker JB Hunt Transport Services (NASDAQ:JBHT), Signet Jewelers (NYSE:SIG) and women's apparel maker L Brands (NYSE:LB) were among the top S&P 500 stocks on the day.
Scientific equipment-and-services company Illumina (NASDAQ:ILMN), Johnson & Johnson (NYSE:JNJ) and medical-device-maker Boston Scientific (NYSE:BSX) were among the S&P 500 laggards on the day.