Dow, S&P close out May at record highs

The stock market closed out May on a mostly higher note Friday, sending two out of the three major U.S. indexes to record highs.

Trading was uneven, and indexes moved between small gains and losses for most of the day. A late push higher left the Dow Jones industrial average and Standard & Poor’s 500 at all-time highs, but just barely.

May was the best month for investors since February. The S&P rose 2.1 percent for the month, while the Dow Jones industrial average rose 0.8 percent and the Nasdaq rose 3.1 percent.

“This market may have been choppy earlier in the year, but the trend is higher,” said Karyn Cavanaugh, a market strategist with Voya Investment Management, formerly known as ING Investment Management.

The Dow rose 18.43 points, or 0.1 percent, to close at 16,717.17, less than two points above its previous record high set on May 13.

The Standard & Poor’s 500 index rose 3.54 points, or 0.2 percent, to 1,923.57, also closing at a new record. The Nasdaq composite, however, fell 5.33 points, or 0.1 percent, to 4,242.62.

On Friday, investors had two somewhat disappointing reports on the U.S. consumer to interpret.

The Commerce Department said consumer spending unexpectedly fell 0.1 percent in April, the first drop in that indicator in a year. Economists expect the drop to be temporary, however. Consumer spending jumped 1 percent in March.

“It is obvious that after an unseasonably colder January and February, consumers came out with a vengeance in March,” Chris Christopher, an economist at IHS Global Insight, said in a note to clients. “So, April’s poor showing on the spending front is payback for a strong March.”

In a separate report, the University of Michigan’s consumer sentiment index fell more than analysts were expecting. The index fell to 81.9 in May from 84.9 in April. Economists had expected 82.8.

Next week will be heavy with economic data. The May jobs report comes out June 6. Economists expect the U.S. economy created 220,000 jobs in May, and the unemployment rate fell to 6.3 percent, according to FactSet, a financial information provider. The European Central Bank will also have its interest rate policy meeting that day.

Lions Gate Entertainment was one of the biggest decliners Friday. The movie studio dropped $3.40, or 12 percent, to $26.13 after reporting a profit of 35 cents per share, a 70 percent drop from the year before and well below what analysts had expected. Lions Gate’s movies include the “The Hunger Games” series.

Sunglasses retailer Pacific Sunwear dropped 52 cents, or 18 percent, to $2.42. The company warned investors that would report a two-cent loss this quarter versus the two-cent profit that analysts had expected.

The yield on the 10-year Treasury note was little changed at 2.47 percent. Bond yields are the near their lows for the year thanks to strong demand from foreign and U.S. buyers.

“If we were in a normal bond market, these yields would signal weakness in the U.S. economy,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. “But I think what’s going on is more of a temporary phenomenon.”

Roughly 3.2 billion shares traded hands on Friday on the New York Stock Exchange, slightly below the 50-day average. Volume has been relatively light this week, which was shortened by the Memorial Day holiday in the U.S. on Monday.