U.S. stocks capped the best week since January, with the S&P 500 Index climbing above 2,500 for the first time, as investors showed resilience in the face of a North Korean missile test. The dollar weakened after an unexpected decline in August retail sales raised concern over the economy’s strength.
Investors largely shrugged off the latest rise in tensions on the Korean peninsula and a terrorist attack in London, with haven assets from the yen to gold declining. The S&P 500 took the round-number milestone in the final minutes of trading to end the week with a 1.6 percent advance. The Dow Jones Industrial Average also closed at a record. The greenback pared its biggest weekly gain since February as the Bank of England’s hawkish shift bolstered the pound. Oil ended near $50 a barrel to cap its best week since July. Yields on 10-year Treasuries topped 2.2 percent.
With economic themes back in the foreground, markets are showing signs of becoming conditioned to provocative actions from North Korea, which has launched more than a dozen missiles this year and tested a nuclear device. The August decline in sales and downward revisions to the prior months make it more likely that consumption, the biggest part of the economy, will be hard-pressed to match the 3.3 percent growth pace of the prior quarter.
“Retail sales were weak but some of that is built in because you caught a piece of the hurricanes,” said Andrew Brenner, the head of international fixed income at Natalliance Securities. “Central banks trump everything else right now. They’re going to become much more important in the next wave of where markets move.”
Volume was unusually high Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.
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- The S&P 500 Index rose 0.2 percent to 2,500.22 as of 4 p.m. New York time.
- The Stoxx Europe 600 Index fell 0.3 percent at the close.
- The MSCI All-Country World Index climbed 0.2 percent.
- The MSCI Emerging Market Index gained 0.2 percent.
- The U.K.’s FTSE 100 Index sank 1.1 percent.
- The Bloomberg Dollar Spot Index fell 0.2 percent.
- The euro climbed 0.2 percent to $1.1941.
- The British pound gained 1.3 percent to $1.3568, the strongest in almost 15 months.
- The Japanese yen dipped 0.6 percent to 110.92 per dollar.
- The yield on 10-year Treasuries rose one basis point to 2.2 percent, a three-week high.
- Germany’s 10-year yield increased two basis points to 0.43 percent, hitting the highest in almost four weeks.
- Britain’s 10-year yield rose seven basis points to 1.3 percent.
- Gold fell 0.6 percent to $1,321.69 an ounce.
- West Texas Intermediate rose 0.1 percent to $49.93 a barrel. Prices rose almost 5 percent in the week, buoyed by higher demand forecasts.
— With assistance by Robert Brand, Matthew Burgess, Adam Haigh, Eddie Van Der Walt, and Sho Chandra