The US markets closed higher on Friday, with both the S&P 500 and the Nasdaq ending at record highs, as optimism over corporate earnings outweighed the threat of a government shutdown. While a shutdown is seen as having little impact on the pace of economic growth, such an outcome would add another element of uncertainty to a market that is already seen as trading at lofty levels, and which hasn’t seen even a mild decline in more than a year.
On the economy front, the University of Michigan’s consumer sentiment index fell in January to a reading of 94.4, the worst reading since July. Consumers assessed the current condition as worsening, though they were a touch more optimistic about the future. The report said less attractive pricing was the culprit. Consumers are still confident about future buying plans, and this survey suggests the public thinks tax cuts will help them to some extent. Tax reform was spontaneously mentioned by 34% of all respondents; 70% of those who mentioned tax reform thought the impact would be positive, and 18% said it would be negative.
The Dow Jones Industrial Average added 53.91 points or 0.21 percent to 26,071.72, the Nasdaq gained 40.333 points or 0.55 percent to 7,336.38, and the S&P 500 edged higher by 12.27 points or 0.44 percent to 2,810.30.
