U.S. equities and stock exchange traded funds managed to touch new highs as consumer sectors help bolster bullish sentiment and Federal Reserve minutes pointed to gathering momentum in the economy.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were up 0.4% Thursday.
Among the leading areas of the market, consumer discretionary stocks in the S&P 500 gained 1.0% Thursday, with shares of Best Buy surging 21.0% after the electronics retailer raised profits and sales outlook for the year and revealed quarterly earnings that topped analysts’ estimates.
Analysts also looked to the S&P 500‘s back-to-back gains above the 2,400 level, arguing that the consecutive gains are providing technical support.
“Breaking through 2,400 on the S&P 500 is a bit of a technical help, so you’re getting the benefit of people coming into the market since that level was such a staunch resistance for so long,” Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters.
Minutes from the Fed’s latest meeting showed that officials backed a rate hike and proposed plans to wind down its $4.5 trillion in debt securities, fueling expectations that policy makers are projecting continued strength in the U.S. economy.
On the other hand, energy companies in the S&P 500 plunged 1.8% Thursday after the Organization of Petroleum Exporting Countries agreed to extend output cuts. However, observers argue that the OPEC cuts are too little too late as U.S. shale oil production would more than offset the reduced supply.
“There seems to be a lot of shale production from the U.S. coming back online, so even with production cuts from OPEC, there is a strong risk that supply will remain very, very ample,” Jane Foley, strategist at Rabobank, told the Wall Street Journal.
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