Dow hits new record high, gains 426 points

Record High
Record High

The stock market closed at a new record on Friday, capping off a winning week for stocks.

The blue-chip Dow gained 426.16 points, or 0.97%, to reach 44,296.51, marking a new all-time closing high and its third straight positive session. The S&P 500 added 0.35% to finish at 5,969.34 for its fifth consecutive winning day.

The technology-heavy Nasdaq rose 0.16% to 19,003.65. However, gains were restricted by slides of 3.2% and 1.7% in certain sectors, respectively. The Dow ended the week about 2% higher, while the S&P 500 and Nasdaq each added about 1.7%.

This marks a turn from previous periods when Wall Street’s postelection rally stalled.

Investors have been shifting exposure from tech to more economically sensitive corners of the market, explaining why sectors such as industrials and consumer discretionary led the S&P 500 higher, while communication services underperformed. Small-cap stocks also showed strength this week, with the Russell 2000 climbing 1.8% in Friday’s session to finish the week up by roughly 4.5%.

“Investors are rotating out of the previous high flyers of large-cap communication services and technology and into other cyclical sectors of consumer discretionary, industrials, and financials, as well as mid- and small-cap stocks,” said Sam Stovall, chief investment strategist at CFRA Research. “Drivers continue to be the traditional end-of-election-year rally, in which all sizes, styles, and sectors within the S&P 1500 rose in price.”

According to Strategas, there is skepticism on the rate of revenue growth forecasted by analysts for 2025. While the top-line appears directionally correct, consumer trends may weaken over the next year.

“It will be difficult for the consumer to replicate its strong positive trend line as growth in wages and savings anniversary,” CEO Nicholas Bohnsack wrote in a research note. Decker’s Outdoor Corporation touched levels never seen before after investment bank Needham initiated coverage. Shares jumped more than 5% on Friday.

Dow posts third straight positive session

Analyst Tom Nikic opened coverage with a buy rating and included the stock in the firm’s “conviction list,” setting a price target of $218. “DECK is one of the highest-quality companies in our coverage,” Nikic noted, citing the company’s strong brands, stellar management team, and a fortress balance sheet.

The stock is now up more than 70% in 2024, on track for its 9th straight winning year. UBS maintains a positive view on the AI compute industry, especially on NVIDIA, despite some potential risks heading into 2025. “On the back of strong expected revenue growth in 2025, we maintain our positive view,” said analyst Sundeep Gantori.

He recommended investing in quality AI stocks amid higher near-term volatility due to product transition and tariff-related uncertainties. Super Micro Computer shares moved around 11% higher in afternoon trading, bringing its week-to-date gains to more than 77%, marking its biggest weekly gain on record. The gains follow the company’s compliance update with Nasdaq’s exchange rules.

Shares have risen around 16% this year and more than 13% month to date. The utility sector outperformed this week, with the XLU ETF up more than 3% week to date, making it the best-performing sector ETF of the week. Key contributors like NextEra Energy and Dominion Energy have shown significant gains, contributing to the sector’s strong performance.

Robert Schein, chief investment officer of Blanke Schein Wealth Management, remains optimistic about the market’s strength into the end of 2024. “The stock market is living up to its historical dynamic of seasonal strength in November. We expect this strength to continue into year-end,” Schein said.

Friday’s closing results suggest a continuation of the recent trend where economically sensitive sectors outshine high-flying tech stocks, pointing to a broader market recovery as the year draws to a close.

Adam Josefs

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