Stocks finished higher on Friday, capping the best June performance since 1955 and the best first half performance in two decades. The Dow added 73 points, while the S&P 500 gained 0.6% and the Nasdaq Composite increased by 0.5%. All 11 S&P 500 sectors finished in positive territory, with the Financial sector outperforming after the Federal Reserve announced that all U.S. banks passed the central bank’s annual stress tests, clearing the path for each lender to increase dividends and share buybacks. In earnings news, Constellation Brands advanced 4.7% after the spirits company topped Wall Street projections on both the top and bottom line. Nike shares added 0.4% despite the athletic apparel maker missing Wall Street profit projections for the first time since 2012.
Breadth was positive on issues by roughly 4-1 on the NYSE and by 8-3 on the Nasdaq. Volume on the composite NYSE was more than 5.3 billion shares.
On the economic front, the core PCE deflator, which is the Fed’s preferred proxy for inflation, increased 1.6% year-over-year in May, slightly above projections of 1.5%. Additional reports showed that personal income rose more than anticipated in May, while the final report on consumer sentiment from the University of Michigan was revised to 98.2 from the previously reported 97.9. Treasuries were little-changed after the updates, with the 10-year note yield finishing at 2.01%.
For the week, the S&P 500 lost 0.3%, but gained 6.9% in June and 3.8% for the quarter. The Dow’s 0.4% weekly slide capped a 7.2% June advance and a 2.6% second quarter increase. The Nasdaq also lost 0.3% on the week, but ended the month and quarter 7.4% and 3.6% higher, respectively.