U.S. stocks closed higher on Friday, with the Nasdaq setting another record as investors cheered major earnings reports. ( Tweet This )
“It looks to me like the bloodless verdict of the market is earnings are acceptable,” said Maris Ogg, president of Tower Bridge Advisors.
The Nasdaq Composite closed at a record for the second day in a row. The index set its first record close in 15 years on Thursday, topping the previous high from March 2000.
The S&P 500 ended mildly higher for a new record close. Earlier, the index also touched a new intraday high, while the Dow struggled to shake off a decline as its top-weighted stocks lagged.
“Obviously it’s a hot Nasdaq market making new highs at the close yesterday and at new highs today with leadership in big stocks,” said Bruce Bittles, chief investment strategist at RW Baird. “The message is the Nasdaq is making new highs and this time it’s different.”
Microsoft surged more than 10 percent to lead blue chips gains. The company posted earnings and revenue that beat estimates after the close Thursday, as the firm shook off the negative impact of the strong U.S. dollar with growth in hardware sales and commercial cloud computing.
Amazon.com closed up 14 percent after spiking 15.5 percent to a new intraday high. The stock gained despite reporting an expected decline in earnings and light guidance. Revenue did beat expectations with a boost from the e-commerce firm’s primary market, North America.
“It shows me there’s still a lot of speculation in the market,” Bittles said, noting the inability of the Dow and S&P to reach the same record levels as quickly as the Nasdaq.
The Dow Jones industrial average still had more than 1 percent to go before surpassing its record close.
Katie Stockton, chief technical strategist at BTIG, said in a note that “we expect a breakout to be confirmed in the days ahead, allowing the SPX to resolve its triangle pattern to the upside. Typically, triangles give way to sharp moves, and a measured move price projection would get the SPX to about 2180. Notably, the (Nasdaq Composite) is approaching final resistance at its 2000 high—a breakout would clear an important psychological hurdle from the chart.”
“The tough part is if we get a new high, how much higher do we go after that?” said Randy Frederick, managing director of trading and derivatives at Charles Schwab.
Futures briefly pared gains following durable goods that beat on the headline figure but showed a disappointing decline in the core figure.
Durable goods, ex-transportation, fell 0.2 percent, below expectations for a slight gain but less than February’s 1.3 percent decline. Including transportation, which tends to be volatile, the report posted an increase of 4 percent for March, surpassing expectations for a moderate bounce back, after February’s disappointing 1.4 percent month-on-month drop.
Starbucks surged more than 4.5 percent to hit an all-time high on Friday. The coffee retailer topped expectations for global same-store sales and beat on both the top and bottom lines.
“We see that narrowing of that breadth of the market and that’s not healthy. We need a broad advance,” said Lance Roberts, general partner at STA Wealth Management.
He said if the S&P 500 closed above 2,111.19, “we’ve broken out of consolidation and the bullish trend is intact.”
To Kim Forrest, senior equity analyst at Fort Pitt Capital, the market is “not bifircated.”
“Earnings is a time when we pick winners and losers,” she said, noting how companies declined or gained based on their business model.
She was most excited about gains in IBM and Amazon from their cloud computing services.
“Everybody thinks it’s the new companies in the Silicon Valley that will be responsible for (the cloud),” she said. But for the bulk of operations “you turn to a company that’s in your trusted data center.”
The Apple Watch becomes available on Friday, ahead of Apple‘s earnings report after the close on Monday.
Biogen fell more than 6.5 percent after the company’s first-quarter sales of Tecfidera, an oral multiple sclerosis drug, came in at $824.90 million, below consensus estimates, according to Reuters.
Xerox closed down 8.5 percent after the company posted quarterly earnings and revenue that missed analysts’ expectations. The company also cut its full-year forecast amid a strong U.S. dollar.
AstraZeneca shares fell more than 1.5 percent after the company reported that sales fell by 6 percent in the first quarter, citing a rising dollar and competition from Nexium generics, according to Reuters.
Generic drugmaker Mylan said on Friday it would commence a formal offer to acquire Perrigo, three days after Perrigo rejected its unsolicited offer. Mylan itself a target of an unsolicited $40 billion bid from larger rival Teva Pharmaceutical Industries.
Investors also kept an eye on oil, which closed at a new high for 2015 on Thursday but failed to hold that level on Friday.
“I think it’s getting a little ahead of itself,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “We’re probably headed to $60 but in the short-term overpriced.”
Crude oil futures settled down 59 cents, or 1.02 percent at $57.15 a barrel on the New York Mercantile Exchange. Gold futures ended down $19.30 to $1,175.00.
The S&P 500 closed up 4.76 points, or 0.23 percent, at 2,117.69, with consumer discretionary leading four sectors higher and energy the greatest decliner.
The Nasdaq closed up 36 points, or 0.71 percent, at 5,092.08, a new record.
Advancers were a touch ahead of decliners on the New York Stock Exchange, with an exchange volume of 765 million and a composite volume of 3.3 billion in the close.
High-frequency trading accounted for 47.5 percent of March to date’s daily trading volume of about 6.2 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 12.
The U.S. 10-year Treasury yield held near 1.91 percent. The U.S. dollar weakened, with the euro creeping towards $1.09.
In Europe, European equities were higher on earnings despite little progress on Greece debt talks in the meeting of the euro zone finance ministers.
Greece is willing to make compromises to reach a deal on its debt, Finance Minister Yanis Varoufakis said on Friday after tense talks with his euro zone peers on this issue.
“The cost of not having a solution would be huge for all of us, Greece and the euro zone,” Varoufakis told reporters.
Greece is running out of cash and needs a last tranche of bailout aid in order to meet debt repayments. So far, its reform drive has been slow and the aid has not been released.
German Finance Minister, Wolfgang Schaeuble, said he did not believe there would be decisive progress on Greece in Riga, while his Austrian counterpart said he was “quite annoyed” with the lack of progress over reforms, Reuters reported.
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.
—Reuters and CNBC’s Fred Imbert contributed to this report.
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