The S&P 500 and Nasdaq notched record highs Friday, as tech continued its march higher in the wake of data pointing to underlying strength in the U.S. consumer.
The Dow Jones Industrial Average rose 0.57%, or 161 points, erasing its losses for the year. The S&P 500 added and Nasdaq Composite gained 0.67% and 0.60% to notch another record close.
Signs the consumer, an important driver of growth, is not reining in spending continued to support optimism over the pace of the recovery.
Consumer spending rose by 1.9% in the month of July, according to the Commerce Department, topping economists' forecast for a 1.5% increase.
The rise in spending was slower than the prior month's 6.5% surge, raising concerns growth could slow again this month. But some on Wall Street said the spending more likely will pick-up as U.S. lawmakers are poised to eventually roll out more fiscal stimulus.
"Even if spending does contract in August, the weakness is likely to be short-lived. Another round of fiscal support - which is still our base case - should reverse the Aug cliff and cause personal income to reaccelerate sharply in the September/October timeframe," Jefferies (NYSE:JEF) said in a note.
Energy was among the biggest gainers on the day, up more than 1%. The sector shrugged off weakness in U.S. oil prices as bets on major disruptions to U.S. energy infrastructure limiting output further were reined in after Hurricane Laura passed along the U.S. Gulf Coast causing less damage than feared.
Big tech also supported the broader move higher as the Fab 5 racked up gains.
Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) amd Facebook (NASDAQ:FB), which make up about the quarter of the S&P 500, closed higher.
Tech was also helped by a 6% rally in Dell Technologies (NYSE:DELL) after the company reported better-than-expected results on both the top and bottom lines.
Elsewhere on the earnings front, Ulta Beauty (NASDAQ:ULTA) surged 6% after its second-quarter profit topped consensus estimates, underpinned by a strong e-commerce performance.
In other news, Herbalife Nutrition (NYSE:HLF) cut the bulk of its losses to end flat after the company reportedly agreed to pay $123 million to settle charges alleging it bribed Chinese officials to expand its business in the country, according to media reports.