US stocks climbed on Friday, with the S & P 500 and the Nasdaq on track to close records, after Federal Reserve President Jerome Powell confirmed the central bank's strategy for the gradual normalization of monetary policy, with an emphasis on strength in the economy and robust business results that helped to support the willingness to invest for shares.
What do the most important benchmarks do?
The industrial average of Dow Jones
DJIA, + 0.53%
rose climbed 153 points, or 0.6%, to 25.808, the S & P 500 index
SPX, + 0.58%
18 points added, or 0.6%, to 2,875.13, and an intraday record above 2,875.
The nasdaq composite index
COMP, + 0.76%
63 points, or 0.8%, added to 7,942, an intra-day record calculated at 7,949.25, the first highest score ever since July 25.
For the week the S & P stands at 0.9% and is on track for its second consecutive weekly win. The Nasdaq is 1.6% higher than the week, while the Dow is 0.5% higher, which would mean the second consecutive positive week for the blue chip average.
On Thursday, the main indices ended slightly lower in a quiet trading session characterized by low volume.
What drives the market?
During the annual monetary policy symposium of the Kansas City Federal Reserve at Jackson Hole, Wyo., Powell said he sees two risks of interest rate hikes, which he described as "too fast and unnecessary to shorten the expansion, move too slowly, and threatening destabilizing overheating. "
He said: "I see the current path of gradually raising interest rates as the [Federal Reserve’s] approach to take both risks seriously. "
The central banker's commentary marked his first public appearance since President Donald Trump criticized the central bank's policy plans and said he was not & # 39; happy & # 39; was with the Fed's policy path and said he thought Powell was a "cheap money" policy maker was fundraising in the Hamptons.
See: Fed & # 39; s Powell reduces the risk of overheating, but still expects a gradual increase rate
Checking outEx-Wall Streeter Powell says that Fed should ignore envy-parent thinking, raise rates in small doses
Market participants said that Powell's speech, economic data, including a report on sustainable orders and strong quarterly results, contributed to supporting the buying of stocks on Wall Street.
That said, trade has been quiet lately, with light volumes and narrow trading margins, a function of declining earnings and a seasonally dampened trading period.
Powell's speech comes two days after the release of the minutes of the Fed's latest confab, with the central bank broadly supporting a new rate hike in September, with many officials claiming that as long as economic data remains strong, " probably be fast enough to take the next step in removing policy accommodation. "
Increased trade barriers between the US and its major trading partners also remain in view because the last round of talks between the US and China has not produced any visible sign of progress. Reuters reported Friday that China would continue to take revenge, as the US imposes tariffs, although the measures would be as targeted as possible to prevent companies in China, both domestic and foreign, from experiencing damage.
Do not miss it: This is why stocks are almost exclusively focused on trading, in one graph
This past week was perhaps most notable for the legal problems surrounding President Trump. Tuesday, Michael Cohen, the former lawyer of the president, said he had broken the law on campaign funding towards Trump, while former president Paul Manafort of Trump was found guilty of eight charges, including tax fraud.
The shares have largely ignored the political news so far, but a larger dropout could increase uncertainty about trade policy and the forthcoming midterm elections. Trump said Thursday that the market would crash and that "everyone would be very poor" if he were to be deposed.
Read: This is why rising Trump impeachment opportunities are not rumbling to investors in the stock markets
Also see: Stock market that is likely to undergo a severe stress test in September
Which data is focused?
US durable goods orders fell for the third time in four months in July, driven by a decline in new passenger aircraft contracts Boeing Co..
BA, + 0.46%
Durable goods orders fell by 1.7% in July, the government said Friday. Economists questioned by MarketWatch had predicted a 1.1% decrease in orders for durable goods products that lasted for at least three years.
What do strategists say?
"It struck me as a little stupid," said Karyn Cavanaugh, senior market strategist at Voya Investment Management, in reference to Powell's speech. "I think it was refreshing for the market to hear Powell say that inflation was not a problem and that they agreed with it – it is a treat for the eye of the market."
The main take-away of Powell's speech, according to Bricklin Dwyer, senior US economist at BNP Paribas, is that the Fed will remain cautious when it comes to rate hikes and that it will focus on economic data for future monetary policy decisions.
Which stocks are in the picture?
ADSK, + 14.14%
increased by 15% after reporting the earnings and revenues in the second quarter that exceeded expectations.
Shares of HP Inc.
decreased by 2.2% after the technology company reported sales in the third quarter at the end of Thursday that missed expectations, although the adjusted profit exceeded expectations.
INTU, + 1.63%
rose 1.6% after it said late on Thursday that the chief executive officer and the chief technology officer were planning to resign. The company called their replacements and reported adjusted results for the fourth quarter that exceeded expectations.
SunTrust Robinson Humphrey upgraded Netflix Inc.
NFLX, + 5.43%
to buy from hold. The share jumped by 5.1%.
AND B, -1.64%
agreed to buy Spectra Energy Partners
SEP + 3.30%
in a deal worth $ 3.3 billion. Enbridge's shares fell by 1.7% and Spectra's shares increased by 3.3%.
Hibbett Sports Inc.
sank by 29% after the retailer reported sales in the second quarter and sales in the same store that were below expectations. It also reduced its profit forecast for 2019.
shares fell by 3.9% after the company reported second quarter results that exceeded expectations.
Ross Stores Inc.
ROST, + 0.09%
shares remained the same after the discount retailer had outlooked for the full year below expectations.
In the second quarter, it recorded profits and sales that exceeded expectations, while sales in the same store at its flagship stores lagged behind. Gap shares fell by 9.7%.
Shares of Papa John & # 39; s International Inc.
pzza, + 4.96%
rose by 5.7% after reports that the pizza maker had hired bankers to explore his strategic options and stabilize the company after the long-standing CEO was shut down.
S & P Dow Jones Indices said it late on Thursday Arista Networks Inc.
A NET, + 9.19%
would join the S & P 500, instead GGP Inc.
which is purchased by Brookfield Property Partners LP
What did other markets do?
CLV8, + 1.28%
achieved more than 1% in recent action, while golden futures
GCZ8, + 1.62%
also rose sharply and the ICE US Dollar Index
extended his daily and weekly slide.
European equities were usually higher, while Asian markets closed the session mixed.
-Ryan Vlastelica contributed to this report
Providing critical information for the US trading day. Subscribe to the free Need For Know newsletter from MarketWatch. Register here.