By Investing.com– The Dow closed a fresh record high Friday, as the rotation into cyclical stocks including industrials continued to propel stocks higher amid weakness in tech.
At 4.00 p.m. ET (2100 GMT), the Dow Jones Industrial Average gained 426 points, or 0.8% to close at a record of 44,296.51. The S&P 500 index rose 0.3%, while the NASDAQ Composite gained 0.2%.
Boeing leads industrials higher as rotation into cyclicals continued
Boeing Co (NYSE:BA) gained more than 4% to prop up the broader industrials sector as the aircraft maker won a $2.39 billion contract modification from the defense department.
As well as the rise in Boeing, sentiment on cyclicals have also been supported by expectations that a second Donald Trump administration is set to extend U.S. economic exceptionalism.
December rate cut in question
Business activity data, released earlier Friday, showed that the US economy remained relatively healthy, adding to strong jobless claims data released last week.
The S&P manufacturing PMI release rose to 48.8 in November, from 48.5 he prior month, while the more significant services PMI soared to 57.0, from 55.0 in October.
There remains doubt over whether the Federal Reserve will cut interest rates in December, particularly after the strong inflation readings for October, while policymakers also flagged a more cautious approach to further easing.
Traders were seen scaling back some bets that the Fed will cut rates by 25 basis points in December, CME Fedwatch showed this week. Traders were pricing in a 61.7% chance for a December cut.
The equivalent news out of Europe was disappointing earlier Friday, as eurozone business activity took a surprisingly sharp turn for the worse as the bloc’s dominant services industry contracted and manufacturing sank deeper into recession.
Tech sector subdued; Gap surges on blowout earnings
The tech sector will remain in focus Friday, with Google owner Alphabet (NASDAQ:GOOGL) stock dropping more than 1%, adding to losses of almost 5% on Thursday, following the Department of Justice demanding that Google sell its Chrome web browser to help curb the tech giant’s monopoly in online search.
The DOJ also recommended the firm share its data and search results with rivals and potentially sell its Android operating system.
The recommendations come after a landmark ruling earlier this year, that Google operated an illegal monopoly in online search.
Nvidia (NASDAQ:NVDA) stock fell around 3%, handing back the previous sector’s gains as strong artificial intelligence demand fueled an earnings beat, but the AI darling also forecast a slower pace of revenue growth in the current quarter.
Elsewhere, Gap (NYSE:GAP) stock soared nearly 13% after the fashion retailer raised its annual sales forecast and said the holiday season was off to a “strong start”.
On the flip side, Intuit (NASDAQ:INTU) stock fell 5.7% after the financial software company issued disappointing guidance for the second quarter and fiscal year.
(Peter Nurse, Ambar Warrick contributed to this article.)
