Wall Street rallies on strong economic data

Stocks on Wall Street bounced back Friday with a broad rally, driving the S&P 500 to a near record closing high. Spurring investors to buy stocks: strong sales of new homes and the highest reading for factory activity since May 2007.

Independent Advisor Alliance Chief Investment Officer Chris Zacarelli says investors should favor cyclical stocks because earnings are already factored into highly valued tech stocks.

“We just think a lot of that is in the price already, so from an investment point of view, we're definitely looking to put additional dollars working in industrials and financials, and would consider a technology sector more as a ‘hold’ for us.”

The Dow ended the day gaining seven-tenth percent. The S&P 500 tacked on 1%. The Nasdaq rose 1.4%.

For the week, the three indexes gained ground.

Limiting the Dow’s gains Friday: American Express. Shares declined 1.9% after the company reported that spending on travel and entertainment on its cards fell by half as customers stayed home.

Kimberly-Clark was the S&P’s biggest decliner. The tissue maker’s quarterly sales fell as it struggled to repeat the sales surge of the early stage of the pandemic when consumers stockpiled goods.

Shares of Pinterest rose 4%. Credit Suisse raised its price target on the image sharing company. Investors also scooped up tech stocks ahead of earnings reports next week from Apple, Amazon, Facebook and Microsoft.