Gains by big technology and health care companies pushed U.S. stocks modestly higher Friday, lifting several major indexes to new highs.
The Standard & Poor's 500 index, Dow Jones industrial average and Russell 2000 index of smaller-company stocks each set records as the market posted its third straight day of gains.
Energy companies helped lift the market as crude oil prices rose. High-dividend stocks like real estate companies and utilities also posted big gains following a drop in bond yields. The lower yields and a weak forecast from JPMorgan Chase weighed on banks. Financial stocks were the only sector in the S&P 500 to end lower.
Investors brushed off a report showing U.S. retail sales declined in June and drew encouragement from data indicating industrial production rebounded last month. Traders also welcomed a report showing inflation at the consumer level was flat in June, which suggests that the Federal Reserve may have more reason to delay another interest rate increase.
"The low inflation data will put the Fed more in a wait-and-see mode to really determine if the low inflationary environment is really transitory," said Lindsey Bell, investment strategist at CFRA Research.
The S&P 500 index gained 11.44 points, or 0.5 percent, to 2,459.27. The Dow rose 84.65 points, or 0.4 percent, to 21,637.74. The average has hit a record high three days in a row.
The Nasdaq composite added 38.03 points, or 0.6 percent, to 6,312.47. The Russell 2000 index picked up 3.16 points, or 0.2 percent, to 1,428.82.
The indexes all ended the week with gains are on pace to finish higher this month.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.33 percent from 2.35 percent late Thursday.
Investors had mix of company earnings and economic data to consider 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. In addition, the Federal Reserve said U.S. factory output rebounded in June as manufacturers churned out more cars, appliances and furniture. Overall industrial production rose 0.4 percent and is up 2 percent over the past year.
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. As such, the June consumer prices data suggests that "the Fed is not going to get too aggressive on rate hikes," Bell said.
Several big banks reported their second-quarter earnings on Friday. 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 85 cents, or 0.9 percent, to $92.25, while Citigroup slid 30 cents to $66.72. Wells Fargo lost 61 cents, or 1.1 percent, to $54.99.
"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.
Technology and health care companies were among the big gainers. NetApp led all S&P 500 companies, climbing $2.26, or 5.5 percent, to $43.64. Microsoft rose $1.01, or 1.1 percent, to $72.78. Zimmer Biomet Holdings gained $3.51, or 2.7 percent, to $132.49.
High-dividend companies like real estate investment trusts moved higher as bond yields decreased. GGP added 66 cents, or 2.9 percent, to $23.59. Iron Mountain gained 84 cents, or 2.5 percent, to $34.78.
Despite the June decline in retail sales, investors bid 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 $4.34, or 1.7 percent, to $261.74, while Gap rose 50 cents, or 2.2 percent, to $23.28.
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.
In other energy trading, 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 9 cents, or 1.9 percent, to $4.87.
The dollar fell sharply, sliding to 112.56 yen from 113.23 yen late Thursday. The ICE U.S. Dollar Index, which compares the dollar against a basket of major currencies, declined to its lowest level since September. The U.S. currency also weakened against the euro, which rose to $1.1467 from $1.1406.
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.
Major stock indexes in Europe finished mostly lower Friday. 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.
Earlier 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.