S&P 500 rises above 5,000, gains for a fifth week on encouraging inflation news: Live updates

The S&P 500 rose 0.57% to end at 5,026.61 and finish above 5,000 for the first time ever. The Nasdaq Composite rallied 1.25% to close at 15,990.66, while the Dow Jones Industrial Average slipped 54.64 points, or 0.14%, to settle at 38,671.69.

For the week, the S&P added 1.4%, while the Nasdaq‘s gained 2.3% and the Dow finished flat. All three major averages notched their fifth straight winning week and 14th positive week in 15.

— Samantha Subin

The tide may be turning for alternative investments, according to JPMorgan.

In 2023, the share of alternative investments declined for the first time since the pandemic, wrote analyst Nikolaos Panigirtzoglou. And in a reversal from 2022, alternatives underperformed public markets significantly last year.

“Overall, we reverse our previous cautious stance and turn positive on alternatives vs publicly traded traditional asset classes, given the significant narrowing in the gap between private vs. public market valuations and given improving fundraising,” Panigirtzoglou wrote.

The analyst added that within alternative investments, he currently has a particular overweight on hedge funds and private credit loans.

— Lisa Kailai Han

The S&P 500 reaching 5,000 for the first time ever is a positive sign for stocks, according to Adam Turnquist, chief technical strategist at LPL Financial.

Historically speaking, the S&P 500 has been higher one year after crossing a major threshold, the technical strategist noted. Since 1968, the last nine times the broader index reached a new milestone, it was higher by 10.4% on average 12 months afterward. In fact, the S&P 500 was positive 78% of instances.

For example, when the S&P 500 first reached 500 in March 1995, the broader index was higher by roughly 30% 12 months afterward. In February 1998, when the broader index first hit 1,000, it climbed 26% over the subsequent one-year period.

There were only two instances when the S&P 500 was not higher one year afterward. In March 1987, which preceded the stock market crash in October of that year, the broader index touched 300 before pulling back by 10.7% one year afterward. In August 2014, the S&P 500 hit 2,000 before losing 3% one year later.

In fact, Turnquist said the S&P 500 “may take a few tries to hold above this level” when it breaches 5,000. The broader index was last trading at around 5,018.

— Sarah Min

Executives at New York Community Bancorp have put their own money on the line in bets that the bank can steady itself. Seven corporate insiders have purchased stock of NYCB this week, according to Verity Data.

Those insider buys could help boost the confidence of outside investors as well.

Shares of NYCB were up more than 13% in afternoon trading, but the stock is still below $5 per share.

Shares of NYCB were rebounding on Friday.

Stocks could experience increased volatility in the event that President Joe Biden decides to drop out of the 2024 race, according to Stifel chief Washington policy strategist Brian Gardner.

“We would expect an increase in volatility and perhaps a risk off sentiment as investors weigh the political chaos that could ensue,” Garner wrote on Friday. “The equity market could take a little longer to react as it evaluates the possible replacement of Mr. Biden as the Democratic nominee and what that means for the outcome of the 2024 election and, ultimately, policy changes in 2025.”

Garner thinks Biden will likely remain in the 2024 presidential race, but noted a recent special counsel report which said the President had “poor memory” still leaves a 40% chance for his exit from the election.

Stocks are higher so far on Friday, with the benchmark S&P 500 crossing above the 5,000 level.

— Brian Evans

India, Japan and Israel ETFs are outperforming in 2024

Companies are posting solid results this earnings season, but their revenues are slightly lagging.

As of yesterday, 73% of the 795 stocks that have reported quarterly results so far have posted an earnings per share beat, according to data from Bespoke Investment Group. The top-line revenue beat rate for these companies is lower, however, at 64%. Still, strong earnings results are fueling the S&P 500’s steady gains.

Several companies are set to report next week, including Coca-Cola, Cisco Systems, Sony, Occidental Petroleum and Applied Materials.

— Pia Singh

Megacap technology and consumer discretionary stocks rose on Friday, fueling the market’s rally higher and the S&P 500‘s push above 5,000.

Information technology was the best-performing sector in the S&P 500, jumping 1.4% as semiconductor and solar stocks rose. Applied Materials, Enphase Energy and First Solar were the biggest gainers in the sector, jumping about 6%. Lam Research, KLA Corp, Lam Research, Nvidia and Palo Alto Networks rallied more than 3%.

The consumer discretionary and communication services sectors rose more than 0.8% each. Etsy and Amazon were the top performers in consumer discretionary, adding 4.7% and 2.8%, respectively. Fox Corporation and Alphabet led communication services, adding more than 3% and 2%, respectively.

— Samantha Subin

36 S&P 500 stocks reached new 52-week highs during Friday’s trading session.

Of these names, 25 companies touched new all-time highs, including “Magnificent 7” tech titans Nvidia and Microsoft.

Here are some of the names that hit this notable milestone on Friday:

• Nvidia trading at all-time high levels back to its IPO in Jan 1999
• Microsoft trading at all-time high levels back to its IPO in March, 1986
• ServiceNow trading at all-time high levels back to its IPO in June, 2012
• Palo Alto Networks trading at all-time highs back to its IPO in July, 2012
• American Express trading at all-time high levels back to its IPO in May, 1977
• Eli Lilly trading at all-time high levels back to 1952 when the company offered its first public shares of stock
• General Dynamics trading at all-time high levels back to 1952 when it was incorporated and listed on the NYSE
• Marriott International trading at all-time high levels back through its spin-off from Marriott Corp in 1993
• Ross Stores trading at all-time high levels since its IPO in Aug, 1985
• Boston Scientific trading at all-time high levels back to its IPO in May, 1992

— Lisa Kailai Han, Christopher Hayes

Check out some of the companies making headlines in midday trading.

• Pinterest — Shares fell about 11% after the image-sharing company issued softer-than-expected guidance for its first-quarter revenue.
• CleanSpark – The bitcoin miner surged 37% after posting better than expected results Thursday for its fiscal first quarter.
• Expedia – The travel booking company dropped 18% after fourth-quarter bookings disappointed Wall Street.

Read the full list here.

— Brian Evans

SMH

Top holding Nvidia was trading at all-time highs going back to its public debut in 1999, crossing $700 per share for the first time this week. The AI chipmaker, which has a 24% weighting in the ETF, last advanced 3%.

Synopsys was also at record highs going back to its 1992 IPO, last rising 1.6%. Applied Materials shares jumped 6%. Lam Research shares gained more than 4%.

— Sarah Min

UBS believes the good times will continue for Wall Street as it forecasts the Federal Reserve to start cutting interest rates in May.

Currently investors are experiencing “Goldilocks for equities, at least for now, with more market swings,” according to Jason Draho, head of asset allocation Americas.

Continuing economic growth, ongoing disinflation and rate cuts down the line will support equities, Draho wrote in a Friday note.

“Much of this good news is priced in and valuations look relatively expensive, but that doesn’t prevent more upside,” Draho said.

Although the S&P 500 is expensive relative to historical levels, Draho believes valuations are a “poor predictor of market reversals.” Outside of large-cap growth and tech shares, valuations remain relatively cheap, he added.

— Hakyung Kim

Economic growth will accelerate as inflation cools and the labor market holds strong, according to the latest Survey of Professional Forecasters.

The quarterly outlook, released Friday, indicates real GDP growing at 2.1% annualized rate in the first quarter, up from 0.8% in the last survey, and 2.4% on the year, a 0.7 percentage point increase from the previous estimate.

On inflation, the forecasters see the consumer price index up 2.5% in the current quarter, and the same reading for the full year, the same as before. Unemployment will inch higher to 3.9% this year, though that is done 0.2 percentage point from the previous outlook. Payrolls are expected to grow by 190,000 a month this year, a big jump from the last estimate for 120,000.

—Jeff Cox

Shares of New York Community Bancorp. rose 5.8% during late-morning trading, a relatively muted move for a stock that has dropped more than 60% over the past two weeks.

NYCB’s surprisingly large reserve build and dividend cut announced in late January has led to another round of concerns about regional banks, this time focused on their exposure to commercial real estate.

Many Wall Street analysts and investors have described the issues at NYCB as “idiosyncratic,” but there are worries that the possibility of higher-for-longer interest rates could put stress on other regional banks.

— Jesse Pound

Cloudflare shares rallied more than 23% on Friday, a day after the company posted stronger than expected fourth-quarter results and guidance.

The company posted adjusted earnings of 15 cents per share and revenues totaling $362.5 million. That topped an EPS estimate of 12 cents and the $353.1 million in revenue anticipated by analysts surveyed by LSEG.

For the first quarter, Cloudflare said it expects 13 cents in adjusted net earnings per share on $372.5 million to $373.5 million in revenue. Analysts surveyed by LSEG had called for adjusted earnings of 12 cents per share and revenues of $372.3 million.

With Friday’s gains, Cloudflare is headed for its biggest daily jump since Nov. 10, 2022, when it rallied 24.9%. The stock’s jumped more than 35% since the start of the week. It’s on pace for its best week since August 2022 and its second best week on record.

Cloudflare’s earnings boosted the broader cloud sector, with the WisdomTree Cloud Computing Fund ETF last up 2.5%. UiPath and C3.ai were among the top performers in the fund, with gains exceeding 8%. MongoDB, Asana, Snowflake, Datadog and Okta rallied about 4% each.

Cloudflare heads for best day since 2022

Investors would be better off shifting into small and mid cap stocks rather than chasing the S&P 500 above its latest milestone, according to JPMorgan.

Strategist Eduardo Lecubarri said in a note to clients on Friday that the equity looks near a top and that the decline will bring big stocks closer to their smaller peers.

“We stick to our view that upside from here appears limited and that equities will fall 20-30% from a 2024 peak, with SMid-Caps looking attractive already relative to Large-Caps, as they could underperform by another 200-300 bps tops, but stand to deliver 45% of alpha over the coming 2-3 years,” the note said.

Lecubarri pointed to the performance of small and mid cap stocks, along with areas like China, would suggest a risk-off approach from investors. But with the S&P 500 breaking above 5,000, that same approach apparently is not being applied to large caps.

“We can certainly understand that one asset class can outperform another during periods of time but we cannot understand why SMid has to bake in such a risk premium nowadays, while Large-Caps don’t factor in any, at a time when a lot of the risk on the table today applies to both,” the note said.

— Jesse Pound

The S&P 500 rose on Friday to open above the 5,000 level.

The benchmark index added 0.1%, while the Nasdaq Composite added 0.3%. The Dow Jones Industrial Average inched down 7 points.

For the week, the S&P is up 0.9%, while the blue-chip Dow and the Nasdaq Composite have gained 0.2% and 1.4%, respectively.

— Samantha Subin

Check out the companies making headlines before the bell:

• PepsiCo — Shares slipped 1.4% after the beverage and snacks giant reported mixed fourth-quarter results. Revenue came in at $27.85 billion, missing the LSEG consensus estimate of $28.4 billion. Adjusted earnings per share was $1.78, versus the $1.72 expected. Pepsi said consumers’ budgets were hit by high borrowing costs and lower personal savings.
• Cloudflare — Shares surged 27% after the cloud services provider topped analysts’ expectations in its fourth quarter. Cloudflare reported adjusted earnings of 15 cents per share on revenue of $362 million. Analysts polled by LSEG had called for earnings of 12 cents per share and $353 million in revenue. The company also issued rosy full-year guidance for adjusted earnings per share.
• Pinterest — The stock dropped more than 8% after the image-sharing company issued a weaker-than-expected forecast. Pinterest also disappointed on revenue estimates, but beat on earnings in its fourth-quarter report.

Read the full list here.

— Sarah Min

Bitcoin marched higher to end the week, with its price breaching the $47,000 level for the first time since U.S. bitcoin ETFs began trading on Jan. 11. On Friday the flagship cryptocurrency rose more than 4% to $47,307.00, according to Coin Metrics. Ether advanced 3% to $2,511.75. 

Positive sentiment appears to be returning now as the GBTC outflows have slowed. Additionally, momentum from the S&P 500 briefly touching 5,000 Thursday for the first time ever may be spilling over to crypto.

The move pulled crypto equities higher in premarket trading. Crypto exchange Coinbase and bitcoin proxy Microstrategy each gained 6%, while the biggest miners, Riot Platforms and Marathon Digital, rose 8% and 10%, respectively.

Read the full story here.

— Tanaya Macheel

PepsiCo shares fell 2% before the bell after the food and beverage giant point posted mixed quarterly results amid a drop in North American demand.

The company posted adjusted earnings of $1.78 per share, versus the $1.72 expected by LSEG. Revenue came in at $27.85 billion, falling short of the $28.4 billion expected. Net sales fell 0.5%

Pepsi’s North American divisions reported volume declines, with Quaker Foods reporting an 8% drop. Frito-Lay North America reported a 2% decline, while the company’s North American beverage saw a 6% fall in volumes.

PepsiCo falls on mixed results

Hong Kong Exchange CEO Nicolas Aguzin said on Friday that he would step down and hand over the top job to co-COO Bonnie Y Chan on March 1, about two months before his three-year term formally ends in May 2024.

Aguzin said in a statement that the transition was going “extremely well” and expressed confidence in Chan and the senior management team.

During his tenure as HKEX CEO, Aguzin oversaw the Hong Kong market as it suffered a regulatory crackdown by Beijing during the pandemic, leading to reduced investor enthusiasm for Hong Kong listings.

HKEX’s share price has fallen more than 46% since Aguzin took the helm, plunging from 450.4 Hong Kong dollars ($57.59) a share to HK$242.

Bank of Japan governor Kazuo Ueda has told the country’s lower house of parliament that “chances are high for easy money conditions to persist for a while even if it scraps its negative interest rates policy,” according to a report by Reuters.

The BOJ governor was responding to questions from an opposition lawmaker in the lower house budget committee of parliament.

Ueda’s view echoed a remark from his deputy Shinichi Uchida, who said on Thursday that the BOJ was “unlikely to raise interest rates aggressively, even after ending its negative interest rate policy,”

— Reuters, Lim Hui Jie

Shares of Japan’s Softbank Group jumped almost 10% on open, extending gains from the 11.06% rise recorded on Thursday.

The move comes as chip designer Arm’s shares surged 48% on Thursday, valuing it at over $116 billion.

SoftBank still owns roughly 90% of the outstanding stock, meaning its stake in Arm increased by over $34 billion in a day.

Wharton professor of finance Jeremy Siegel said the market doesn’t look expensive, especially when viewing it from a longer-term lens, even as the S&P 500 pierced the 5,000 mark.

“For the long run, there’s going to be volatility. I don’t advise playing the game of being a short-run trader,” he said on CNBC’s “Closing Bell” on Thursday. “I don’t think right now the market is overvalued for a long-term investor by any means.”

— Yun Li, Lisa Han

Cloudflare shares jumped 18% in extended trading on Thursday after the web security and content distribution network provider issued results and quarterly guidance that proved more robust than analysts had projected.

Big deals from new and existing customers propelled Cloudflare to a new record in annual contract value.

— Jordan Novet