U.S. stocks were on track late Friday afternoon to finish modestly higher, led by gains in technology and health care companies. Energy companies also rose following an increase in oil prices. High-dividend stocks like real estate companies and utilities were posting big gains following a drop in bond yields. The lower yields and a weak forecast from JPMorgan Chase were weighing on bank stocks.
KEEPING SCORE: The Standard & Poor's 500 index gained 12 points, or 0.5 percent, to 2,459 as of 3:12 p.m. Eastern time. The Dow Jones industrial average rose 86 points, or 0.4 percent, to 21,639. The Nasdaq composite added 38 points, or 0.6 percent, to 6,312. The Russell 2000 index of smaller-company stocks was up 5 points, or 0.4 percent, to 1,430. The Dow, S&P 500 and Russell 2000 were all on track to set new highs.
ECONOMIC SNAPSHOTS: Investors were also weighing data on retail sales and inflation at the consumer level Friday. The Commerce Department said retail sales fell 0.2 percent in June as Americans curtailed spending at restaurants, department stores and gasoline stations. That followed a 0.1 percent drop in May. Meanwhile, the Labor Department said U.S. consumer prices were flat in June, the latest evidence that inflation remains muted. All told, inflation has climbed just 1.6 percent from a year ago.
The market rallied on Wednesday after Federal Reserve Chair Janet Yellen hinted that the Fed could slow its rate hike plans if inflation continues to run below the Fed's 2 percent target.
THE QUOTE: "The market is not up that much today, but it's probably a reaction to the weak inflationary numbers, meaning that the Fed is not going to get too aggressive on rate hikes," said Lindsey Bell, investment strategist at CFRA Research.
QUARTERLY RESULTS: Several big banks kicked off the second-quarter earnings season. Among them were JPMorgan Chase, Citigroup and Wells Fargo, each of which posted results that beat Wall Street's expectations. But it wasn't all good news. JPMorgan, the nation's largest bank by assets, said it expects weaker net interest income. Falling bond yields also weighed on the sector. When bond yields decline, it forces interest rates on loans lower, which makes it harder for banks to make money from lending. JPMorgan fell 98 cents, or 1.1 percent, to $92.12, while Citigroup slid 34 cents to $66.68. Wells Fargo lost 70 cents, or 1.3 percent, to $54.90.
"It's an encouraging sign that the market is rotating outside of financials, but (investors) didn't use it as a catalyst to take down the whole market," said Victor Jones, trading director at TD Ameritrade.
TECH SHINES: Technology companies were among the big gainers. NetApp rose $2.29, or 5.5 percent, to $43.68. Seagate Technology added $1.21, or 3.2 percent, to $39.53.
YIELD PLAY: High-dividend companies like real estate investment trusts moved higher as bond yields decreased. General Growth Properties added 58 cents, or 2.5 percent, to $23.51. Iron Mountain gained 86 cents, or 2.5 percent, to $34.80.
RETAILERS REBOUND: Despite the June decline in retail sales, investors were bidding up shares in several retail chains after some analysts upgraded the sector a day after Target raised its second-quarter forecasts and said sales and customer traffic increased. Ulta Beauty gained $4.67, or 1.8 percent, to $262.07, while Gap rose 57 cents, or 2.5 percent, to $23.35. Macy's added 35 cents, or 1.6 percent, to $22.46.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.32 percent from 2.35 percent late Thursday.
GREENBACK SLIDE: The dollar was down to 112.58 yen from 113.23 yen late Thursday. The ICE U.S. Dollar Index, which compares the dollar against a basket of major currencies, slid to its lowest level since September. The U.S. currency also weakened against the euro, which rose to $1.1464 from $1.1406.
OIL & GAS: Energy futures closed higher. Benchmark U.S. crude rose 46 cents, or 1 percent, to settle at $46.54 per barrel on New York Mercantile Exchange. Brent crude, used to price international oils, gained 49 cents, or 1 percent, to $48.91 per barrel in London. Wholesale gasoline picked up 3 cents to $1.56 a gallon. Heating oil rose 2 cents to $1.52 a gallon. Natural gas gained 2 cents to $2.98 per 1,000 cubic feet.
The increase in oil and gas prices helped lift energy stocks. Chesapeake Energy gained 10 cents, or 2.1 percent, to $4.88.
METALS: Gold rose $10.20, or 0.8 percent, to $1,227.50 an ounce. Silver gained 24 cents, or 1.5 percent, to $15.93 an ounce. Copper added 3 cents to $2.69 a pound.
MARKETS OVERSEAS: In Europe, Germany's DAX fell 0.1 percent, while the CAC 40 in France was flat. The FTSE 100 index of leading British shares slid 0.5 percent. In Asia, Japan's Nikkei 225 added 0.1 percent and South Korea's Kospi rose 0.2 percent. Hong Kong's Hang Seng index inched up 0.2 percent.