Stocks could stumble Friday as investors reassess the market's rapid run, and declines in American Express and Microsoft weigh on the Dow.
The Dow Thursday raced higher, adding 2.1 percent to 9069, its highest close since Nov. 5. The S&P 500 jumped 2.3 percent to 976, its best level since Nov. 4. But the Nasdaq was the star, rising for the twelfth day by 2.4 percent to 1973, in its longest winning streak in 17 years.
The U.S. corporate earnings season has set off a world wide rally in risk assets, as investors once more are willing to bet on an economic recovery this year. Of the 30 percent of the S&P 500 companies reporting earnings so far, 76 percent have beat analysts' estimates even as revenues for many have been dropping.
Stocks Thursday got a boost from a third month of gains in existing home sales, plus a plethora of earnings reports where companies topped Wall Street's weak expectations for the bottom line. News the Senate will not meet its August deadline for a health care bill also helped stocks, traders said. The Dow and S&P 500, in the past nine sessions, have risen more than 11 percent, and the Nasdaq has risen 12.4 percent.
Many traders have been skeptical of the market's run, and some expect investors to take profits Friday on concerns the market has moved too quickly.
Microsoft, American Express and Amazon.com all disappointed after the bell. Microsoft revenue fell steeper than expected and sales of its Windows system fell for the first time ever. Microsoft reported profits of $3.045 billion, compared with $4.397 billion last year. Its sales fell 17 percent to $13.1 billion, below analysts' forecast of $14.48 billion.