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NEW YORK (AP) — U.S. stocks were hovering near record highs Friday, on track to end another winning week with the most stunning gains since Halloween.
The S&P 500 rose 0.4% in afternoon trading and could end the day above 5,000 for the first time after briefly breaking above 5,000 on Thursday. Heading into their 14th winning week in the last 15 weeks.
The Dow Jones Industrial Average fell 76 points, or 0.2%, a day after hitting a new all-time high. The Nasdaq Composite was up 1.2% as of 1:45 p.m. ET, coming within 0.8% of its record high set in 2021.
The Wall Street rally began with hopes that once inflation subsided, the Federal Reserve would ease pressure by cutting interest rates. These cuts appear to be slower than expected, as the economy continues to be reported to be significantly stronger these days. However, this strength has raised expectations for corporate profits and supported stock prices.
Cloudflare was the latest company to soar, reporting strong profits in its latest quarter that beat analysts’ expectations. The cloud services company soared 22.3% after announcing it signed both its largest new customer and largest contract renewal ever, despite the overall economic environment “remaining difficult to predict.”
Big tech stocks were doing much of the market’s heavy lifting, as they have been for more than a year, in part due to mania around artificial intelligence technology. Nvidia, Microsoft and Amazon were the strongest forces pushing the S&P 500 up by at least 1% each.
That helped offset a 2.9% decline at PepsiCo, which reported earnings for the latest quarter that fell short of analysts’ expectations. The company said growth has slowed as customers return to pre-pandemic snacking and other behaviors.
Expedia also fell 18.6% despite reporting better-than-expected profits. Analysts say some of the company’s forecasts for the first three months of 2024 suggest that booking growth will slow. The company also announced that new CEO Arian Gorin will take over in May.
Take-Two Interactive, the publisher of “Grand Theft Auto” and other video games, reported lower-than-expected profits, falling 7.5%. The company also revised downward its earnings forecast for the fiscal year ending at the end of March.
Earnings season, which passed the halfway point this week, has seen profits for large companies in the S&P 500 generally beat expectations.
That helped fuel optimism on Wall Street, but contrarians say it may have gone too far and pushed stocks to extremely expensive levels.
Traders are flowing into some riskier investments at a sufficient pace that the contrarian strategy maintained by Bank of America, which currently leans more towards selling than buying, remains convincing. Not at a certain level. This indicator tracks the level of fear and greed in the market, and suggests buying in October when fear reaches convincing highs.
In the bond market, U.S. Treasury yields edged higher, but the move was calmer than at the beginning of the month, when yields soared as traders pushed ahead with expectations for rate cuts.
The yield on the 10-year U.S. Treasury rose to 4.18% from 4.15% late Thursday.
In overseas stock markets, indexes were mixed. In Asia, several markets were closed for the Lunar New Year holiday.
Tokyo’s Nikkei stock average rose 0.1% after hitting a 34-year high earlier in the day.
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AP Business writers Matt Ott and Yuri Kageyama contributed.
Stan Cho, Associated Press
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