By David French

(Reuters) – The Dow Jones Industrial Average and S&P 500 chalked up record closing highs on Friday, buoyed by an earnings-driven jump in Netflix (NASDAQ:NFLX) shares, alongside broader gains in technology stocks.

All three major Wall Street benchmarks also comfortably secured a sixth straight weekly gain, marking their longest winning streak since late 2023.

For the week, the S&P 500 gained 0.9%, the Nasdaq Composite advanced 0.8%, and the Dow Jones Industrial Average climbed 1%.

Shares of Netflix surged 11.1% to a record closing high after the streaming giant exceeded Wall Street estimates for subscriber additions and projected continued growth through the end of the year.

Many of the so-called Magnificent Seven tech stocks, which have driven much of Wall Street's rally this year, rose.

Apple (NASDAQ:AAPL) gained 1.2% following reports of a significant increase in new iPhone sales in China, while chip heavyweight Nvidia (NASDAQ:NVDA) advanced 0.8% after BofA Global Research raised its price target on the stock.

Netflix's surge lifted the communication services sector by 0.9%, making it the largest gainer among the 11 S&P 500 sectors, while information technology rose 0.5%.

"It's kind of the 'what's not to like' market," said David Waddell, CEO of Waddell & Associates, referring to positive economic data, disinflation, and optimistic corporate earnings and forecasts.

On Friday, the S&P 500 rose 23.20 points, or 0.40%, to close at 5,864.67 points, while the Nasdaq Composite advanced 115.94 points, or 0.63%, to 18,489.55. The Dow Jones Industrial Average gained 36.86 points, or 0.09%, closing at 43,275.91.

For the Dow, it was the fifth session in the last six that it posted a record closing high. However, its gains on Friday were restrained by American Express (NYSE:AXP), which fell 3.1% after the credit card company's quarterly revenue missed estimates.

Financial companies have generally reported positive earnings this season. The S&P Banks index slipped 0.1%, ending its winning streak at five.

The upbeat earnings from financial firms and favorable economic data have supported the three main indexes' upward trend recently.

However, stretched valuations—the S&P 500 is trading at nearly 22 times forward earnings—combined with high expectations for corporate results and potential volatility around the Nov. 5 U.S. presidential election, could leave stocks vulnerable to a pullback.

David Waddell remarked that strong corporate earnings might override any political concerns or worries about overvalued stocks. "We have gotten all we're going to get from multiple expansion, so I think the path forward is completely reliant on earnings," he said. "We're priced for pretty-darn-good earnings, so it could create a disturbance if we don't get them, but absent a recession, I think the bull is intact."

Small-cap stocks have attracted investor interest recently, with both the Russell 2000 and S&P Small Cap 600 outperforming major indexes last week. However, both small-cap indexes dipped slightly on Friday.

Energy was the only S&P sector to drop, falling 0.4% as it was affected by lower oil prices and a 4.7% decline in SLB following earnings that fell short of expectations. This weighed on other oilfield service providers like Baker Hughes and Halliburton (NYSE:HAL), which dropped 1.3% and 2.1%, respectively.

The energy index was the week's worst-performing sector, declining 2.6% as U.S. crude prices slumped 7% due to concerns over Chinese demand and ongoing conflicts in the Middle East.

CVS Health (NYSE:CVS) fell 5.2% after replacing CEO Karen Lynch with company veteran David Joyner and withdrawing its 2024 profit forecast.

This news also impacted other health insurers, including Cigna (NYSE:CI) and Elevance Health, the latter of which fell 3.1%, closing at its lowest level in nearly 15 months.

U.S. exchanges saw a trading volume of 10.62 billion shares, compared to the 11.56 billion average for the full session over the past 20 trading days.