The Dow Jones Industrial Average edged higher Friday to post its fourth straight record close, while the S&P 500 broke its win streak as the rally lost strength ahead of the weekend.
The S&P 500 index slipped 2.01 points to close at 2,161.74 for a weekly gain of 1.5%. The Dow Jones Industrial Average added 10.14 points to finish at 18,516.55, climbing 2% for the week. The Nasdaq Composite Index shed 4.47 points to 5,029.59 but finished the week 1.5% higher.
All three indexes advanced for a third week in a row.
"We have had a really, really good week, and the market is getting tired," said Mark Kepner, managing director of sales and trading at Themis Trading. "But bonds sold off a fair amount and the rally in stocks seems a bit long in the tooth. A pullback from here would not be surprising."
The 10-year Treasury note yield rose 4 basis points to 1.57% on Friday, having recovered more than 20 basis points since hitting a record low 1.33% a week ago.
"The market ran out of steam for a bit. It can't go up every day," said John Manley, chief equity strategist at Wells Fargo Advantage Funds. But the fact that stocks are down so little despite "the market being on stilts" is a good sign.
A survey from American Association of Individual Investors showed bullish sentiment at 36.9% versus bearish sentiment of 24.4% while those who were neutral stood at 38.7% for the week ended July 13.
Richard Hastings, macro strategist at Seaport Global Securities LLC, said the combination of bullish and neutral views is at the highest since April and that this upbeat mood should remain intact for now.
Frank Cappelleri, executive director at Instinet LLC, also suggested that there is more upside potential for the market, noting that in the 20 previous incidences where the S&P 500 climbed for five sessions in a row, it extended gains 80% of the time by an average of 1.55% 20 days later.
"Recent history shows that the probability of higher prices is in the bulls' favor," Cappelleri said in a note.