WASHINGTON: Earnings-day blowups, leverage warnings in China, Apple’s worst rout since August. Oh, and a sixth straight week of gains for the S&P 500. No matter what happens lately, stocks just keep rising, with record closes piling up in U.S. benchmarks at a rate that is starting to defy precedent. The Nasdaq 100 Index has finished at all-time highs 62 different times this year, on par with the most ever in 1999, while the S&P 500 and Dow Jones industrial average are closing in on history, too. For bears, the elongating list of highs bespeaks euphoria, particularly when the market has been spared a 3 percent pullback for more than a year. Investors have ignored bad news ranging from North Korea to political drama at the White House to what may be the biggest profit slowdown in six years.
On the other hand, bailing out just because stocks are at a record is a poor excuse for a trade. The S&P 500 has produced 49 fresh highs this year, an annual rate that’s been surpassed just five times since 1946. In all but one previous instance, stocks kept going up the next year, notching 20 additional highs on average, data compiled by Bloomberg show. “I find the number of highs is irrelevant. What matters to me is the duration of a recovery,” said Christian Ledoux, director of equity research at South Texas Money Management. “Unless you think earnings are going to slow down or go negative, I wouldn’t stay away from stocks.” For the week, the S&P 500 climbed 0.9 percent to 2,575.21, capping its longest streak of gains since the first quarter. The Dow average added nearly 457 points, or 2 percent, to 23,328.63. The Nasdaq 100 rose 0.3 percent to 6,108.82. The Dow has made 53 records since January, poised for the most since 1995. In the week just ended, the measure crossed the 23,000 level for the first time ever — the sixth 1,000-point milestone reached in the past 12 months. Investors, shunning stocks during most of the 8 1/2-year bull market, have started to warm up to the rally. They added $8.4 billion to U.S. equity funds during the week through Oct. 18, the first back-to-back inflows since March, data compiled by EPFR Global show.
