Stocks close higher as market sets record

NEW YORK (AP) – Investors shrugged off the potential for a federal government shutdown Friday, driving U.S. stocks higher and setting new milestones for several of the indexes.

The Standard & Poor’s 500 index, Nasdaq composite and Russell 2000 index of smaller-company stocks finished at record highs as the market bounced back from modest losses a day earlier. The S&P 500 has now posted a weekly gain in nine of the last 10 weeks.

Retailers, banks and consumer goods companies accounted for much of the latest gains. Energy stocks fell along with crude oil prices. Utilities also declined as bond yields edged up to their highest level in more than three years.

The market rally suggested that the possibility of a federal government shutdown this weekend wasn’t worrying traders.

“Looking back to some of the previous shutdowns, they weren’t terribly extended in nature and didn’t cause a lot of disruption by the time everything was done,” said Tim Dreiling, regional investment director at U.S. Bank Private Wealth Management. “I don’t think it’s going to disrupt growth or make much of an impact on GDP, for example.”

The S&P 500 index rose 12.27 points, or 0.4 percent, to 2,810.30. The Dow Jones industrial average gained 53.91 points, or 0.2 percent, to 26,071.72. The average hit a new high on Wednesday.

The Nasdaq added 40.33 points, or 0.6 percent, to 7,336.38. The Russell 2000 index of smaller-company stocks picked up 20.90 points, or 1.3 percent, to 1,597.63.

Bond prices fell. The yield on the 10-year Treasury rose to 2.66 percent from 2.63 percent late Thursday. That’s the highest level since July 2014. The increase in yields weighed on bond-proxy stocks, such as utilities. Exelon declined 62 cents, or 1.6 percent, to $37.97.

Despite an eleventh-hour effort to reach an agreement, Republicans and Democrats appeared no closer to averting a government shutdown before a midnight Friday deadline. After an afternoon meeting with President Donald Trump, Senate Democratic leader Chuck Schumer said the discussions would continue after having made “some progress.”

U.S. House lawmakers voted late Thursday for a stopgap funding bill to keep federal agency doors open until mid-February, but Senate Democrats and some Republicans threatened to block it. Democrats want the bill to include protections for younger immigrants who were brought to the U.S. illegally as children.

Investors have driven stock indexes higher on optimism over the global economic outlook and corporate earnings, and the possibility of a federal government shutdown did not dim that enthusiasm Friday.

Investors bid up shares in clothing makers, restaurant chains, department stores and other consumer-focused companies. Toy maker Mattel led the pack, climbing 91 cents, or 6 percent, to $16.14.

They also drove up tobacco manufacturers, food and beverage makers, and other consumer products companies. Philip Morris International picked up $3.85, or 3.7 percent, to $108.92. Campbell Soup added $1.14, or 2.5 percent, to $47.39.

Banks and other financial stocks also rose. Synchrony Financial gained $1.17, or 3.1 percent, to $38.47.

Lowe’s rose 3.5 percent after the home-improvement supply retailer named three new directors. The stock added $3.59 to $104.95.

Some big companies missed out on the broader market gains Friday.