NEW YORK — Strong third-quarter results from technology companies drove investors into stocks on Friday, giving the market its third straight weekly gain.
After reporting results that topped expectations, Microsoft rose 6 percent and Amazon.com rose 9 percent, while the S&P’s 500 index hit another record. As for the Nasdaq, it’s the highest it’s been in 13 years.
The gains were broad. All 10 industry groups in the S&P 500 rose, led by telecommunications with an increase of 1 percent.
Earnings for companies in the S&P 500 index are expected to grow 4.5 percent in the third quarter over the same period a year ago, according to S&P Capital IQ, a research firm. While respectable, that rate of growth is less than half what was expected at the start of the year.
Some market watchers say even that profit growth may not last. They note that much of it is coming from cutting expenses, not increasing revenue, as the global economy remains sluggish.
“The question is: What is the outlook for earnings?” Steven Ricchiuto, chief economist at Mizuho Securities, said. “There is only so much you can do with cost-cutting.”
The Dow climbed 61.07 to close at 15,570.28. The S&P 500 rose 7.70 to 1,759.77. The Nasdaq edged up 14.40 to 3,943.36, its highest close since September 2000.
Major U.S. stock indexes have soared this year: The S&P 500 is up 23 percent, the Nasdaq composite 31 percent.
In addition to higher earnings, investors have been encouraged by continued economic stimulus from the Federal Reserve. Many had expected the Fed to pull back from its stimulus before the end of year, but now think the central bank will hold off until next year, possibly until March.
The Fed is buying $85 billion worth of U.S. government and other bonds with the aim of keeping interest rates low.
The stimulus program has helped investors brush aside a few warning signs about the market. Stocks look fully priced by some measures comparing them to earnings, for instance. And revenue growth is slowing. Revenue for S&P 500 companies is expected to grow just 2 percent for all of 2013, half the growth of the year before.
Economic news Friday suggested they may struggle to increase sales for a while yet.
The U.S. government that reported orders for long-lasting factory goods, excluding aircraft and military-related products, fell 1.1 percent.
Also, the University of Michigan said its index of U.S. consumer sentiment fell in October as concern grew that the partial government shutdown this month and the political fight over the nation’s borrowing limit would slow growth.
Notice about comments:
The Post and Courier is pleased to offer readers the enhanced ability to comment on stories. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We ask that you refrain from profanity, hate speech, personal comments and remarks that are off point.