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Dow Leads, Nasdaq Lags Despite Amazon.com Stock Gains

The stock market closed higher Friday, as the Dow Jones industrial average again led. The Nasdaq lagged despite gains for Amazon.com (AMZN) stock and other major Nasdaq components.

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The Nasdaq composite made a record high earlier Friday but reversed, closing a fraction higher. The Dow led with a 0.4% increase and topped the 25,000 level. Dow component Johnson & Johnson (JNJ) fell 1.4% in above-average turnover after a jury ordered the company to pay $4.7 billion in damages in a case that blames its talcum powder for cervical cancer.

The S&P 500 rose 0.1% and closed just above the 2800 level for the first time since Feb. 1. The S&P 500 and Nasdaq this week cleared June highs. Small caps lagged, after the Russell 2000 reversed lower to end with a 0.2% loss.

Volume fell, according to preliminary data.

Netflix (NFLX) was a drag, after the video streaming service slid more than 4%. The company announces earnings after the close Monday. Read this earlier Stock Market Today column on one bullish pattern the stock has shown on its chart.

But Amazon.com rose to a new high. The company, a longtime member of IBD Leaderboard, is rising from a three-weeks-tight pattern. The company’s Prime Day sales event for Prime members starts Monday.

Amazon’s cloud-computing business is considering selling its own data switches for business customers. Cisco Systems (CSCO) and other network-equipment stocks sold off on the news. IBD’s networking industry group was Friday’s second lowest, down nearly 3%.

Alphabet (GOOGL), the second-largest component of the Nasdaq, topped the 1,201.59 buy point of a base, but volume was below average.

For the week, the Dow led with a 2.3% increase that beat the Nasdaq’s 1.8% rise and the S&P 500’s 1.5% gain. The Dow may just be playing catch-up. Of the major indexes, it’s the one that has been weakest this year, barely higher for 2018.

By sector, it was retail that led the market Friday. The SPRD Retail ETF (XRT) climbed 0.6%. Home furnishings was the best of 197 industry groups thanks to a 7% surge in shares of luxury furniture retailer RH (RH). The stock broke a trend line touching the highs since RH’s June 12 peak.

Specialty retail, discount chains and electronics stores also were among the top industry groups.

Banks were mainly lower after a batch of earnings reports, which missed some estimates.

JPMorgan‘s (JPM) EPS rose 26% to $2.29 a share while revenue climbed 10% to $28.39 billion. The results beat Wall Street expectations, but JPMorgan shares were modestly lower and remained in a 4-1/2-month consolidation.

Wells Fargo (WFC) missed expectations, with earnings of 98 cents a share and revenue of $21.55 billion. The stock pared losses but still ended the session lower.

Citigroup (C) reported earnings per share of $1.63, on revenue of $18.47 billion, above Zacks views for $18.43 billion but below the Thomson Reuters estimate of $18.51 billion. EPS topped Zacks estimates of $1.54. Shares fell 2% in heavy volume.

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