A strong week for stocks ended on a quiet note Friday. The main market indexes have carved out solid gains for the week thanks to encouraging inflation readings and the Federal Reserve's talk of potential rate cuts coming next year. Today, the action was a little more subdued as market participants digested this week's red-hot rally.
At Friday's finish, the Dow Jones Industrial Average was up 0.2% to 37,305, a new record close. The Nasdaq Composite rose 0.4% to 14,813, while the S&P 500 ended with a fractional loss at 4,719. All three indexes closed higher for a seventh straight week, the longest such stretch for the S&P 500 since November 2017.
Manufacturing data in focus Friday
It's been a busy week of economic data and today's reports showed struggles in the manufacturing sector. Specifically, S&P Global's flash manufacturing purchasing managers index (PMI) fell to 48.2 in December from November's 49.4. Readings below 50 indicate contraction activity.
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The services PMI, on the other hand, which measures activity in the services sector, hit a five-month high of 51.3 in December.
The data also showed that cost pressures gained momentum this month due to rising input prices. However, while "firms continued to pass through higher costs to customers, and at a strong rate, the overall pace of prices charged inflation softened from November," the report noted.
Elsewhere, the New York Fed's Empire State Manufacturing Survey, which measures manufacturing activity in New York state, fell 24 points in December to negative 14.5 – a four-month low. Negative readings signal worsening conditions.
Separate data from the Fed showed industrial production in the U.S. rose by 0.2% in November, while manufacturing output rose 0.3%. "The increase in manufacturing output was more than accounted for by a 7.1% bounceback in motor vehicles and parts production following the resolution of strikes at several major automakers," the report said.
Costco announces $15 per-share special dividend
In single-stock news, Costco Holdings (COST) jumped 4.5% to a new record close of $658.70, after the warehouse club reported higher-than-expected fiscal first-quarter earnings of $3.58 per share on in-line revenue of $57.8 billion.
Also included in Costco's quarterly report was news the company will pay a $15 per-share special dividend. COST is already one of Wall Street's top dividend stocks, having increased its payout for 19 years straight. Plus, this will mark Costco's fifth special dividend since 2012.
One thing not mentioned in the report was a Costco membership fee hike, which CFRA Research analyst Arun Sundaram (Hold) thinks will come when "inflation moderates further and consumer purchasing power improves."
Boeing keeps daily win streak alive
Boeing (BA) was another blue-chip stock that gained ground Friday. Shares of the aerospace company closed up 2.8% – their eighth straight win – after UBS Global Research raised its price target for the Dow Jones stock to $315 from $275, representing expected upside of 20% to current levels.
According to S&P Global Market Intelligence, Street price targets on Boeing range from a high of $300 to a low of $190, with the mean arriving at $256.69.
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