Markets Show No Signs of Surrender as Stocks Cap Four-Week Advance
The S&P added 0.2% to 1,692.09 to extend its 2013 advance to 19%. The index's relative strength index stood at 68, demonstrating that there may be further upside to this record-setting market which hit intraday and closing record highs this week. The index gained 0.71% for the week.
"This is such a deceptive environment... you'd think it's the nineties again," said Michael Gayed, chief investment strategist at Pension Partners. "I am certain that the feeling people are having about the stock market are the same they had in 1987." The Dow Jones Industrial Average was little changed on Friday at 15,543.74 as the blue-chip index gained 0.51% for the week, while the technology-heavy Nasdaq fell 0.7% to 3,587.61. The index posted a loss of 0.35% for the five-day trading period.
Microsoft plummeted 11.4% to $31.40 after the software giant's fiscal fourth-quarter results missed Wall Street's top- and bottom-line estimates. Microsoft reported quarterly revenue of $19.9 billion, up from $18.06 billion in the year-earlier quarter, but well below the $20.73 billion expected by analysts.
Google slumped 1.6% to $896.60 after the Internet search giant posted second-quarter earnings that missed analysts' expectations. Google earned $9.56 a share on $11.1 billion in revenue, excluding traffic acquisition costs.
Better-than-expected earnings from General Electric
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Investor sentiment was bolstered earlier in the day when China's central bank announced the beginning of sweeping reforms on interest rates as the government seeks to sustain the country's economic growth. The People's Bank of China said it was removing the floor on its lending rates at commercial banks, allowing the bank the flexibility to reduce rates as much as necessary to encourage borrowing.
AMD was the biggest laggard on the S&P, dropping by 13.2% to $4.03 after the chipmaker predicted that gross margins would decline as it works to gain market share in game consoles.