Stocks Rise Slightly to Cap Off Another Record-Setting Week

Stocks rose slightly on Friday, reaching record highs once again, as Wall Street wrapped up a solid weekly performance amid strong global economic data and a solid start to the earnings season.

The Dow Jones Industrial Average traded 39 points higher, or 0.1%. The S&P 500 was up 0.1% while the Nasdaq Composite advanced 0.1%.

Friday’s muted performance was in contrast to the market’s moves for the week. The Dow and S&P 500 were both up around 1.8% week to date. The Nasdaq, meanwhile, had gained more than 2%.

Chinese industrial data for December came in better than expected overnight, with production rising 6.9% on a year-over-year basis. The overall Chinese economy grew by 6.1% in 2019, matching expectations. To be sure, that is also the slowest growth rate for the Chinese economy since 1990.

In the U.S., housing starts soared nearly 17% in December and reached a 13-year high. That data follows Thursday’s release of better-than-forecast weekly jobless claims and strong business activity numbers from the Philadelphia Federal Reserve.

RT: Traders DOW 29,000 hats 200115
Trader Peter Tuchman and specialist trader Michael Pistillo wear DOW 29,000 hats on the floor at the New York Stock Exchange (NYSE) in New York, January 15, 2020.
Brendan McDermid | Reuters

Corporate earnings have also been better than expected to start off the reporting period. More than 8% of the S&P 500 has reported quarterly results thus far, FactSet data shows. Of those companies, 72% of companies gave posted better-than-expected earnings.

Schlumberger reported Friday quarterly earnings that beat analyst expectations, sending the stock up slightly. CSX’s earnings also beat expectations, but the stock slid more than 1%. Big banks such as Goldman Sachs, Bank of America and Morgan Stanley all reported quarterly figures that exceeded estimate earlier this week.

“We didn’t have much in the way of earnings growth last year,” said Chris Marx, senior investment strategist for equities at AllianceBernstein. “But we do expect to see reasonable earnings growth if people’s confidence holds up, and that should be constructive for the market.”

Thus far, Wall Street is building on its strong performance from 2019. The S&P 500 is up around 3% year to date along with the Dow. The Nasdaq, meanwhile, has already climbed more than 4%.

“Risk assets are off to a good start in 2020,” said Gregory Faranello, head of rates at AmeriVet Securities, in a note. “Returns last year were off the charts. But when you factor in the late 2018 market corrections across both equities and credit, things look less stellar.”

Still, billionaire hedge fund managers David Tepper and Stanley Druckenmiller think this bull market can produce more gains. Tepper told CNBC’s Joe Kernen in an email: “I love riding a horse that’s running.” Tepper, meanwhile, told Kernen in a separate email he is still bullish in the “intermediate term” in part because of the Federal Reserve’s current monetary policy stance.

— CNBC’s Silvia Amaro contributed to this report.

By: Fred Imbert