The Nasdaq MarketSite in New York. Image Credit: Bloomberg

NEW YORK: The S&P 500 and the Nasdaq closed at record levels and the dollar reached a two-month high on Friday as strong economic data and a string of upbeat earnings reports brought buyers back to the market.

Positive quarterly results from a broad range of US companies, including Google parent Alphabet Inc, Intel Corp, Starbucks Corp and McDonald’s Corp helped allay disappointment over Amazon.com’s miss.

US economic growth slowed to a 2.1 per cent annual rate in the second quarter, a better reading than analysts expected, driven by a jump in consumer spending, which made up for a drop in imports and a smaller inventory build-up.

“GDP growth was not fabulously good and not fabulously bad.

It builds a case for the Fed to cut rates by 25 basis points and then sit on the sidelines for the remainder of this year,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Market participants now look to the coming week, when negotiators from the US and China are due to resume talks in Beijing aimed at ending the market-rattling trade war, and the Federal Reserve is expected to cut interest rates for the first time in a decade at the conclusion of their two-day monetary policy meeting.

“Anybody who’s still thinking that the Fed is considering going 50 basis points next Wednesday should probably abandon that expectation,” said Tom Simons, a money market economist at Jefferies in New York.

The Dow Jones Industrial Average rose 51.47 points, or 0.19 per cent, to 27,192.45, the S&P 500 gained 22.19 points, or 0.74 per cent, to 3,025.86 and the Nasdaq Composite added 91.67 points, or 1.11 per cent, to 8,330.21.

A rally in large-cap stocks pushed European shares higher, as positive earnings and a surge in Vodafone Group shares spurred a recovery from Thursday’s sell-off, which was driven by the European Central Bank leaving interest rates unchanged.

The pan-European STOXX 600 index rose 0.31 per cent and MSCI’s gauge of stocks across the globe gained 0.29 per cent.

Bucking the trend, emerging-market assets slipped as investors shied away from riskier assets after ECB President Mario Draghi gave a rosier-than-expected economic outlook.

Emerging market stocks lost 0.50 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.69 per cent lower, while Japan’s Nikkei lost 0.45 per cent.

The dollar index, which measures the greenback against other world currencies, climbed to a two-month high, marking its second straight weekly advance.

The dollar index rose 0.2 per cent, with the euro down 0.18 per cent to $1.1125.

The Japanese yen weakened 0.05 per cent versus the greenback at 108.71 per dollar, while Sterling was last trading at $1.2386, down 0.55 per cent on the day.

US. Treasuries were steady after yields briefly inched higher following the US Commerce Department’s better-than-expected GDP report.

Benchmark 10-year notes last /32 in price to yield 2.0738 per cent, from 2.074 per cent late on Thursday.

The 30-year bond last rose 6/32 in price to yield 2.5944 per cent, from 2.603 per cent late on Thursday.

Oil prices inched higher and closed up for the week as healthy economic data brightened the crude demand outlook, and as concerns persisted over the safety of oil transport around the Strait of Hormuz.

US crude oil futures settled at $56.20 per barrel, up 0.32 per cent, while Brent crude oil futures settled at $63.46 per barrel, a 0.11 per cent advance.

Spot gold added 0.2 per cent to $1,417.04 an ounce.

Copper lost 0.68 per cent to $5,966.00 a tonne.

Three-month aluminium on the London Metal Exchange lost 1.07 per cent to $1,806.50 a tonne.