S&P 500 Aims for Longest Streak of Record Highs in 20 Years

10/05/17 12:45 PM EDT
By Michael Wursthorn and Riva Gold 
   -- Major U.S. stock indexes head for fresh records 
   -- CBOE Volatility Index hovering near all-time low 
   -- Spanish assets recover 

The S&P 500 was on course for its longest streak of record closes in 20 years, as shares of financial firms pushed major indexes higher.

The broad index added 0.4% Thursday after hitting its fifth straight high a day earlier. The Dow Jones Industrial Average gained 84 points, or 0.4%, to 22746, while the Nasdaq Composite added 0.5%.

Each major index has hit more than 40 records this year, supported by strong earnings and global economic growth, even as some investors remain wary that stocks have gotten pricey.

"We've pared back on U.S. exposure and made a tilt overseas, but not a dramatic one," said Doug Cohen, managing director of portfolio management at Athena Capital Advisors. "The reality is this is one of the more expensive markets in the last 100 years, but equities are still the most attractive asset class."

A measure of expected stock volatility, the CBOE Volatility Index, was recently down 3% to 9.34, near its all-time closing low of 9.31 set in December 1993.

Financial firms in the S&P 500 added 1% as bond yields rose.

Higher yields tend to portend better profits for lenders, and the yield on the benchmark 10-year Treasury note was recently 2.357%, according to Tradeweb, compared with 2.332% on Wednesday. Yields rise as bond prices fall.

U.S. stocks have enjoyed small bumps higher in recent sessions amid signs that the U.S. economy remains on track and earnings growth continues to look solid.

Data Thursday showed the number of Americans filing applications for new unemployment benefits fell in late September, though recent hurricanes continued to disrupt economic activity in several regions. The Labor Department last week also warned the storms will likely affect Friday's monthly employment report.

"Investors understand data will be flipping over the next month due to the impact of hurricanes," said Dave Donabedian, chief investment officer at CIBC Atlantic Trust Private Wealth Management. "But I still think there will be rising confidence in the idea that this economic expansion is not over."

Food and beverage companies and other consumer staples rose 0.6% in the S&P 500. Constellation Brands gained nearly 4% after the Corona brewer posted strong beer sales. Shares of Dr Pepper Snapple Group and PepsiCo climbed 0.8% and 1.1%, respectively.

Technology companies, big contributors to this year's rally, continued to support indexes as well. PayPal Holdings gained 1.7%, while Apple rose about 1% after the company released a software update that it said addresses some cellular-connectivity issues that have affected its newest smartwatch. Apple suffered its worst month of the year in September after falling 6%.

Netflix surged 3.5%. The company said it plans to raise prices for its video-streaming services in an effort to raise revenue amid rising content costs.

In Europe, the Stoxx Europe 600 rose 0.2% after snapping a nine-session winning streak on Wednesday, its longest in more than two years.

Spanish stocks showed signs of recovering after Catalonia set a course toward declaring its secession from Spain as soon as Monday. Spain's IBEX 35 index added 2.5% after sliding nearly 3% Wednesday, its biggest percentage decline in more than a year.

Investors also eyed minutes of the European Central Bank's September meeting released Thursday, which showed policy makers discussed how to scale back stimulus and argued over reasons for the euro's climb this year.

The euro was recently down 0.5% at $1.1705, while the British pound fell 0.9% to $1.3131. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, rose 0.4%.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Riva Gold at riva.gold@wsj.com


(END) Dow Jones Newswires

October 05, 2017 12:45 ET (16:45 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.