US stock indexes hit all-time highs again on Friday, with the Dow climbing above 28,000 points for the first time in history.
All three major indexes closed at record highs, ending yet another week in the green.
The Dow (INDU) finished up 0.8%, or 223 points, Friday, making it its fourth consecutive week of gains. The S&P 500 (SPX) climbed 0.8% on Friday, ending its sixth straight week of gains. The Nasdaq Composite (COMP) advanced for a seventh week in a row, closing up 0.7% on the day.
The week’s rally was driven by hopes for a trade deal between the United States and China and some better-than-expected retail sales data Friday.
“With the Dow closing above 28,000 for the first time, we have further confirmation that this rally may have further to go. Whenever a major index cracks a significant level, like the Dow just did, the psychological effect can help to push markets even higher. With the S&P 500 also hitting new highs, the trend is clearly upward despite the real economic and political risks. Psychology matters in the markets, as it affects how news is interpreted, and this is just one more even that is likely to make perceptions even more positive,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.
Stocks have been hitting continuous records over the past weeks.
White House Economic Adviser Larry Kudlow expressed optimism over a US-China trade deal on Friday, boosting investor sentiment. The countries announced they were close to a “phase one” deal mid-October but have yet to sign it. In the meantime, the market has been getting mixed signals from officials, sometimes buoying and sometimes hurting hopes that a deal will be struck.
Meanwhile, economic data showed that the American consumer continues to be willing to spend, which is good news for US economic growth. Consumption accounts for some two-thirds to GDP growth.
October retail sales rebounded from a sluggish September, due mostly to gasoline store sales.
“Net, net, American shoppers returned to the stores and malls in October, but the coast isn’t clear yet for consumer spending in the fourth quarter of the year,” warned Chris Rupkey, chief financial economist at MUFG.