Another Late-Session Surge Salvages a Friday for S&P 500 Bulls

It isn’t over till it’s over. Especially on Friday.

For the second time in two weeks, a final-hour ramp in the S&P 500 turned the index green for bulls, with the benchmark equity gauge jumping 6 points in a little over 30 minutes to close with a 0.1 percent advance and help preserve a fifth straight weekly gain. A similar spike salvaged gains seven days earlier.

“The machines kicked in and brought all the averages positive at the close,” Andrew Brenner, head of international fixed income for National Alliance Capital Markets, wrote in a note to clients. “We think markets move big time next week off the Trump speech Tuesday.”

After the financial crisis, traders were afraid of bad news coming out over the weekend. Now it’s the other way around, according to Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey.

“The general fear for hedge funds, as well as traditional investors, is that they’ll be caught flat-footed and short on the market ahead of big positive news,” said Morganlander, who helps oversee about $172 billion. “They’re conditioned at this point to buy on the dip, especially considering how this market has been trading.”

The benchmark index ended the week at a record 2,367.34, while the Dow Jones Industrial Average added 198 points in the five days to end at 20,821.76 after an 11-session climb, tied for the longest since 1987. Small-cap shares had the first down week in six, with the Russell 2000 Index dropping 0.4 percent.

The post-election rally in U.S. stocks continued for a fifth straight week, although at a different temperature. Earlier leaders of the so-called “Trump trade,” energy stocks and banks, surrendered leadership to more typical defensive companies, from utilities to consumer staples makers.

In place of the economically sensitive companies that led the market’s 11 percent gain since Nov. 8, it was high dividend-paying companies and perceived safety stocks that pushed the market for a fifth weekly advance, the longest stretch in almost a year.

While promises of fiscal spending and speculation about higher interest rates sent inflation expectations higher after the election, investors may be seeing signals of that trend stalling. As global yields decline, utility shares are now in their fourth week of gains, the longest streak since June.

Tech shares and real estate companies also advanced in the week as earnings season drew to a close. Profits at real estate companies rose 12 percent from a year ago while tech companies grew their share by 10 percent, according to data compiled by Bloomberg.

Equities have rallied against the backdrop of persistently low volatility. The VIX Index ended the week slightly lower than it began, at 11.5, 25 percent below its five-year average, Bloomberg data show.

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