NEW YORK (Reuters) – The S&P 500 and Nasdaq notched their best weekly gains in more than a year on Friday as technology stocks helped lift major indexes to records.
It was the strongest start to a year for all three major indexes since 2013.
A U.S. tax overhaul last month that includes hefty corporate tax cuts helped to fuel late-year gains and was the first major legislative victory in President Donald Trump’s pro-growth agenda since he took office a year ago.
U.S. stocks this week have been adding to momentum from 2017, driven by a series of strong economic reports from across the globe and expectations for strong fourth-quarter earnings, with all three major indexes hitting milestones in the last few days.
The Dow broke above 25,000 for the first time on Thursday, while the S&P closed above 2,700 on Wednesday and the Nasdaq settled above 7,000 earlier in the week.
“We’re up over 2 percent for the first four days of 2018, so that’s pretty good. Markets are still working to figure out the implications of tax cuts, and that’s provided some of the lift along with already good economic forecasts,” said Mike Baele, managing director at U.S. Bank Private Client Wealth Management in Portland, Oregon.
Weaker-than-expected December U.S. jobs data also could help the Federal Reserve stick to its policy of gradual interest rate hikes in 2018, which would be good for stocks, Baele said.
U.S. job growth slowed more than expected in December amid a decline in retail employment, but a pickup in monthly wages pointed to labour market strength. Non-farm payrolls increased by 148,000 jobs last month, the Labour Department said. Economists polled by Reuters had expected a rise of 190,000.
The Dow Jones Industrial Average .DJI rose 220.74 points, or 0.88 percent, to 25,295.87, the S&P 500 .SPX gained 19.16 points, or 0.70 percent, to 2,743.15 and the Nasdaq Composite .IXIC added 58.64 points, or 0.83 percent, to 7,136.56.
The S&P technology index’s .SPLRCT 1.2-percent gain led the advancers among the 11 major S&P sectors, with gains in Microsoft (MSFT.O), Apple (AAPL.O) and Google-parent Alphabet (GOOGL.O) boosting the index.
The year’s strong start follows a surprisingly sharp rally in 2017 that ended with the S&P 500 up 19.4 percent on the year.
For the week, the Dow rose 2.3 percent, the S&P 500 gained 2.6 percent and the Nasdaq climbed 3.4 percent. Those were the biggest weekly gains for the S&P and Nasdaq since December of 2016.
Among declining stocks, Francesca’s Holdings (FRAN.O) tanked 20.7 percent. The women’s apparel and accessories maker said it expected up to 17 percent decline in current-quarter same-store sales.
Advancing issues outnumbered declining ones on the NYSE by a 1.52-to-1 ratio; on Nasdaq, a 1.47-to-1 ratio favored advancers.
About 6.3 billion shares changed hands on U.S. exchanges, the same as the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.
Additional reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski