The S&P 500 and Nasdaq crept higher on Friday, ahead of the long Memorial Day weekend.
The S&P 500 was up 0.02%, the Dow Jones Industrial Average was flat, and the Nasdaq increased 0.02%.
Crude oil rebounded, climbing 1.5% to $49.62, after a massive slump a day earlier -- undaunted by another increase in U.S. drilling activity. The number of active U.S. rigs rose by two to 722 in the past week, the 19th weekly gain in a row -- but the smallest so far this year.
Crude prices slid nearly 5% on Thursday after an extension to a global output pact disappointed investors looking for more. The Organization of Petroleum Exporting Countries agreed in Vienna on a nine-month extension to a production-cut deal set to expire at the end of June.
Both the S&P 500 and Nasdaq had reached fresh records on Thursday, with positive earnings from retailers Best Buy (BBY) - Get Best Buy Co. Inc. Report , Guess? (GES) - Get Guess? Inc. Report , and Abercrombie & Fitch (ANF) - Get Abercrombie & Fitch Company Report driving increases in the consumer space.
It's hard to be negative when there is momentum like that, but it was a bit misleading, James "Rev Shark" Deporre argued on our premium site for investors, Real Money. Get his insights with a free trial subscription to Real Money.
Health care stocks were the worst performers, deflating from a largely positive week. Major companies in the sector including Johnson & Johnson (JNJ) - Get Johnson & Johnson Report , Novartis (NVS) - Get Novartis AG Report , AbbVie (ABBV) - Get AbbVie Inc. Report , and AstraZeneca (AZN) - Get AstraZeneca PLC Report were all lower.
U.S. economic growth over the first quarter was revised to show a 1.2% increase, far better than an original estimate of 0.7% growth. Analysts had expected a 100-basis-point revision to 0.8% growth. Consumer spending increased 0.6%, while business investment surged 11.9%. Exports gained 5.8% and imports rose 3.8%.
Still, overall economic performance over the first quarter remained somewhat weak as a cautious consumer and delayed winter weather depressed growth.
Durable goods orders for April declined by 0.7%, a narrower decline than an anticipated 1.4% drop. Excluding transportation, orders for long-lasting U.S.-made goods fell 0.4%, a surprise to analysts expecting a 0.4% increase. March orders were revised upward to show 2.3% growth.
Consumer sentiment rose to 97.1 in May, according to the final reading from the University of Michigan. The measure was just 0.1% higher than a month earlier. Views on current economic conditions weakened slightly, while expectations for the future rose.
St. Louis Federal Reserve President James Bullard sounded a dovish alarm on Friday, arguing that inflation trends were "worrisome" and the central bank's forecasts for hiking rates were too steep. Speaking in Tokyo, Bullard said current U.S. prices sit 4.6% below the levels between 1995 and 2012, when inflation was closer to the Fed's 2% target.
Bullard illustrated the discrepancy by pointing out where prices currently sit and where they should be if inflation had hewn closer to the Fed's target.
Most members of the Fed's monetary policy committee, however, have shown a willingness to hike interest rates again "soon," according to minutes from the May meeting.
Most also supported a plan to gradually reduce the Fed's $4.5 trillion balance sheet, a process that should begin this year. Members agreed to continue discussions on the committee's reinvestment policy at its June meeting. Tighter monetary policy is seen as the Fed's vote of confidence in the health of the economy.
Markets already have high expectations for an interest-rate increase at the next meeting of the Federal Open Market Committee, the second of three expected hikes this year. Wall Street has priced in an 83% chance of a 25-basis-point increase to the federal funds rate when the FOMC meets June 13-14, according to CME Group fed funds futures.
In corporate earnings reports, higher membership fees propelled Costco (COST) - Get Costco Wholesale Corporation Reportprofits. The warehouse retailer earned $700 million, or $1.59 a share, in its fiscal third quarter, compared with $545 million, or $1.24 a share, a year earlier. Adjusted earnings of $1.40 a share came in 9 cents above consensus.
Revenue increased 8% to $28.22 billion, higher than consensus. Same-store sales added 5%, above analysts' target of 4% growth, and membership fees rose 4%.
Costco shares climbed more than 1%.
GameStop (GME) - Get GameStop Corporation Report reported a better-than-expected quarter with adjusted earnings of 63 cents a share coming in a dime above estimates. Revenue increased 4% to $2.05 billion, exceeding analysts' target of $1.97 billion. Same-store sales growth of 2.3% were largely tied to the launch of a new portable gaming console, the Nintendo Switch.
Shares still fell 6% after the video game retailer left its forecasts unchanged. GameStop anticipates full-year earnings of $3.10 to $3.40 a share, wrapping consensus of $3.32 a share. Same-store sales are expected to come in flat to as much as 5% lower.
Other earnings of note include LionsGate (LGF) , Ulta Beauty (ULTA) - Get Ulta Beauty Inc. Report , Splunk (SPLK) - Get Splunk Inc. Report , Brocade Communications (BRCD) , and Big Lots (BIG) - Get Big Lots Inc. Report .
Amazon (AMZN) - Get Amazon.com Inc. Report closed at a new record for its fifth session in a row, reaching $995.78, though the e-commerce powerhouse failed to push its way past a never-before-seen $1,000 level. Shares moved more than 1% higher on Thursday after the e-commerce retailer opened its first Manhattan bricks-and-mortar bookstore at Columbus Circle.
The stock has benefited from the Nasdaq's winning streak, closing at its own records for four straight sessions.
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