Stocks finished modestly higher for the week, with the S&P 500 closing +0.67% to 2,383 for a sixth straight week of gains, and the Dow Jones Industrial Average +0.88% to 21,005. The Ten-year treasury yield jumped to 2.49%, pushing bond prices lower.
US economic data remains positive and supportive with GDP, Consumer Confidence, Personal Income & Outlays, and ISM Manufacturing all released during the week. To begin with, fourth quarter GDP showed little change, remaining at 1.9% annualized growth, but consumer spending got a solid upgrade to 3.0% rate.
Increasing to a new cycle high of 114.8, Consumer Confidence easily topped consensus estimates. Personal Income & Outlays data showed inflation up sharply to 1.9%, very near the Fed's 2% target. Lastly, ISM Manufacturing jumped to 57.7 in February, the strongest rate of monthly growth since August 2014. Respondents to the survey commented, “business is improving”, “very positive outlook for this quarter”, and “demand continues to be solid”.
There were mixed earnings from US companies, including disappointments from Target (TGT) and Costco (COST), while Dycom (DY), Donaldson (DCI), and Broadcom (AVGO) topped estimates and provided bullish forecasts. As of March 1, 484 companies from the S&P 500 reported results and total earnings for these 484 index members are up +7.4% on +4.9% higher revenues, with 68.4% beating EPS estimates and 54.1% coming ahead of top-line expectations., according to Zacks Research.
Finally, in tech, Snap held its initial public offering on Thursday, nearing a $40 billion valuation during trade on Friday. This was the biggest tech IPO since Alibaba in 2014. Next week investors will look for the jobs report on Friday.