Nasdaq Record Extends on Google
New York — The Nasdaq composite index rose Friday to an all-time high for a second day after Google jumped on better-than-estimated earnings, while a decline in energy shares muted gains in the Standard & Poor’s 500 Index.
Google soared 16 percent, the most in more than seven years, and Facebook added 4.5 percent to a record. The Nasdaq Internet index gained 2.6 percent. The S&P 500’s energy group dropped 1.1 percent as Chevron lost 1.4 percent and Chesapeake Energy sank 5.5 percent. Boeing slid 1.1 percent after saying it will revise its profit outlook amid higher costs to develop a new refueling tanker.
The Nasdaq composite rose 0.9 percent to 5,210.14, and the Nasdaq 100 index added 1.5 percent to a more than 15-year high. The S&P 500 climbed 0.1 percent to 2,126.64, within 5 points of its all-time high. The Dow Jones industrial average fell 33.80 points, or 0.2 percent, to 18,086.45, weighed by declines in Boeing and Chevron.
“We’re now watching earnings come out, with the background of what’s going on internationally,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. “It looks like Google had a good earnings report, so that’s helping. There’s nothing right now that looks like there’s an impediment to pushing stocks higher or causing a selloff.”
The S&P 500 closed 0.2 percent below its record and had its biggest weekly gain in four months on signs that Greece’s standoff with creditors is nearing a conclusion and a rout in Chinese equities has been contained. The Nasdaq composite marked its best weekly advance since October, up 4.3 percent.
On the second day of her semi-annual testimony Thursday, Federal Reserve Chair Janet Yellen reiterated that she intends to increase borrowing costs this year, while emphasizing that the pace of any subsequent raises will be gradual. She said raising rates too late holds risks, along with tightening too quickly.
Investors will continue to assess economic data for clues on when the Fed will move on rates. A report Friday showed new-home construction climbed in June to the second-highest level since November 2007 amid a surge in apartment projects. Separate data showed the cost of living rose in June for the fifth consecutive month, paced by increases in rents that are helping nudge inflation toward the Fed’s goal.
Another report showed consumer confidence declined more than forecast in July on concerns global risks will dim prospects for the U.S. economy, while consumers remained upbeat about employment and wages.
Investors have also turned more attention to corporate earnings season. Analysts project profits for members of the S&P 500 dropped 5.3 percent in the second quarter, an improvement from a 6.4 percent decline estimated a week ago.
The Chicago Board Options Exchange Volatility Index fell 1.3 percent Friday to 11.95, its lowest since December. The gauge extended its slide to a sixth day, the longest such streak in seven months. About 6.3 billion shares traded hands on U.S. exchanges Friday, in line with the three-month average.
The influence of Google’s rally was clear as technology was the only one of the S&P 500’s 10 main groups to rise, up 1.8 percent. Raw materials and utilities joined energy as the worst performers. Within the tech group, just 21 of 67 stocks gained. The Nasdaq internet index surged to a record amid its best weekly climb since Dec. 2011, with Google and Netflix each rising more than 18 percent during the period.
Kansas City Southern rallied 6.5 percent, the most in almost four years, after the operator of U.S. and Mexico rail lines reported profit that beat analysts’ estimates. The railroad’s gain helped boost the Dow Jones transportation average, which advanced 0.7 percent. Union Pacific gained 1.4 percent.
Honeywell International climbed 1.9 percent, its biggest gain in two months. The company raised the low end of its 2015 profit forecast and posted quarterly earnings that beat analysts’ estimates, buoyed by demand for business-jet engines and building-control systems.
Semiconductors fell, paced by Intel’s 1.4 percent retreat. Advanced Micro Devices lost 4.3 percent to an all-time low after its outlook for third-quarter revenue missed analysts’ estimates. Qorvo decreased 1.7 percent.
Energy companies declined amid a commodities meltdown that sent the Bloomberg commodity index sliding for four consecutive days, the worst losing streak in three months. Transocean lost 7.7 percent to a 20-year low, and Ensco decreased 6.4 percent. ConocoPhillips plans to terminate a deepwater contract for an Ensco rig that was scheduled to begin drilling on Gulf of Mexico prospects in late 2015.
Newmont Mining slumped 3.2 percent to a six-month low, while Barrick Gold Corp. slid 4.9 percent to a more than 24-year low as gold dropped to the lowest since 2010.
Comerica tumbled 6.3 percent, the biggest drop since Oct. 2011. The bank’s quarterly profit missed analysts’ forecasts, and it set aside more money than expected to cover potential losses from the energy sector. Banks in the S&P 500 fell for the first time in seven sessions, with Zions Bancorporation and Regions Financial down at least 2.6 percent.
Best Buy sank 5.8 percent, the most in six months. Bank of America downgraded the electronics chain to the equivalent of a sell, citing concerns that sales will decline in the second half of the year. Best Buy shares have dropped 16 percent this year.