By Abigail Summerville and Johann M Cherian
(Reuters) -Wall Street closed higher on Friday, with all three major indexes posting weekly gains, as investors took comfort from data pointing to robust economic activity in the world’s largest economy.
A measure of business activity rose to a 31-month high in November, boosted by hopes of lower interest rates and more business-friendly policies from President Donald Trump’s newly elected administration next year.
The domestically focused small-cap index outperformed the large-cap indexes, rising 1.8%. The index rose 4.3% this week to close at its highest in more than a week.
Meanwhile, Alphabet (NASDAQ:) fell 1.7% after Thursday’s 4% decline after the U.S. Department of Justice argued to a judge that the company was monopolizing online search.
AI whistleblower Nvidia (NASDAQ:) also fell 3.2% in choppy trading following Wednesday’s quarterly forecast.
An index that tracks value stocks rose 0.78% as investors abandoned their growth peers.
“I’ve been looking forward to this leadership change from technology to everything else. I think we’re in the middle of that shift. Small caps are behaving much better, values are behaving better,” said Mark Hackett, Chief of Investment. Research at National.
The S&P 500 rose 426.16 points, or 0.97%, to 44,296.51, the S&P 500 gained 20.63 points, or 0.35%, to 5,969.34 and gained 31.23 points, or 0. 16%, to 19,003.65.
Industrial stocks led the S&P with a 1.36% gain, while consumer discretionary was the biggest sector decliner, down 0.69%.
This week, the S&P 500 rose 1.68%, the Nasdaq rose 1.73% and the Dow Jones rose 1.96%.
Expectations for the Federal Reserve’s December policy shift recently fluctuated between a pause and a cut as investors weighed the likely impact of Trump’s plans on price pressures.
There is a 59.6% chance that the central bank will cut borrowing costs by 25 basis points, according to CME Group’s (NASDAQ:) FedWatch Tool.
Geopolitics was top of the agenda this week as investors eyed a missile exchange between Ukraine and Russia after Moscow lowered the threshold for nuclear retaliation. Markets are also awaiting Trump’s choice of Treasury Secretary.
“The fact that we have remained calm on a nice, steady stair pattern higher up is very encouraging and reflects the fact that investors are not trading with the emotion they might be given the amount of uncertainty we have faced,” Hackett said.
In business news, Gap Inc (NYSE:) rose 12.8% after parent company Old Navy raised its annual sales forecast and said the holiday season was off to a “strong start.”
Intuitive (NASDAQ:) fell 5.7% on Thursday after its TurboTax parent forecast second-quarter revenue and profit below Wall Street estimates.
On the NYSE, there were 532 new highs and 41 new lows.
On the Nasdaq, 3,076 stocks rose and 1,271 fell as advancing issues outnumbered declining stocks by a 2.42-to-1 ratio.
The S&P 500 recorded 83 new highs and one new low over the past 52 weeks, while the Nasdaq Composite recorded 179 new highs and 85 new lows.
Volume on U.S. exchanges was 13.49 billion shares, compared to the full-session average of 14.65 billion over the past 20 trading days.
