The S&P 500 just hit its seventh straight record high
By Paul R. La Monica, CNN Business
It’s lucky sevens for investors: The blue-chip S&P 500 index rose Friday to close at a record high for the seventh straight day following the strong jobs report.
The last time the S&P 500 had this long a streak of all-time high closes was in June 1997, when the index surged to eight straight records, according to S&P Dow Jones Indices senior index analyst Howard Silverblatt.
Stocks have enjoyed a superb first half of 2021, as investors are excited about the reopening of the economy thanks to Covid-19 vaccines. Corporate profits are booming as a result.
The index will have a chance to match the June 1997 streak on Tuesday. (The US stock market is closed Monday in observance of Independence Day.)
The S&P 500 gained 0.8% Friday. The Nasdaq was up 0.8% and hit another new record in the process. The Dow rose more than 150 points, or 0.4%, and also closed at an all-time high.
The Dow was up 1% this week while the S&P 500 and Nasdaq each finished with weekly gains of about 2%.
But another index that includes smaller US businesses, the Russell 2000, fell nearly 1% Friday. That could be a sign that investors think the improving economy is better news for large multinational firms.
Even though the market is starting to look a bit frothy to some investors, several experts are confident that the record-setting run still has legs. That’s because the economy may be in that proverbial Goldilocks period of being not too hot or too cold.
“The jobs report had something for everyone,” said Michael Arone, chief investment strategist with State Street Global Advisors. “The payrolls number was above forecasts but wage increases were modest. So for those concerned about a significant pickup in inflation, this report didn’t signal that.”
Arone added that it was encouraging to see jobs gains in sectors hit hard by the pandemic, such as leisure and hospitality, retail and education.
He also noted that as the economy continues to improve, corporate earnings should keep rising. That means stocks, while not exactly cheap, aren’t prohibitively expensive just yet.
“This market is being driven by earnings and they are rising faster than expected,” Arone said.
And as long as sales and profits keep climbing, there is little reason to expect stocks to experience a major pullback anytime soon.
“We are at only the beginning of the nascent stages of the next big economic rebound and bull market,” said Michael Reynolds, vice president of investment strategy at Glenmede.
“That doesn’t mean there will be no hiccups or market corrections along the way,” he added. “But this is so different than a typical post-recession environment. There is still so much consumer demand.”
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