By Corrie Driebusch
The Dow Jones Industrial Average capped its election-week rally with another record and its biggest weekly gain in nearly five years.
The blue-chip index rose 39.78 points, or 0.2%, to 18847.66. The index's weekly gain is 5.4%, its biggest jump since December 2011.
The S&P 500 fell 0.1% Friday while the Nasdaq Composite added 0.5%. Both indexes rose 3.8% for the week.
After two high-volume trading days marked by sharp stock swings, Friday was markedly calm, traders said.
"The last couple days we've had big moves. Now everyone's saying, 'let's catch our breath,'" said Frank Ingarra, head trader at NorthCoast Asset Management. "We're in this period of a big rebalance in the market as people try to read the tea leaves to know what the new president is going to do and which sectors are going to win or lose."
Industrial companies and banks have led the surge in recent sessions, as investors poured money into stocks they believe could benefit from possible increased government spending, decreased regulation and a pickup in inflation under a Trump administration.
Industrial companies in the S&P 500 are up 8% this week, while the financial sector is up 11%.
Biotechnology companies also jumped as some analysts and investors said drug-pricing restrictions would have been more likely under Democrat Hillary Clinton. The Nasdaq Biotechnology index slipped 0.6% Friday but was on track for a weekly gain of roughly 14%.
At the same time, money rotated out of some of the biggest market winners since the financial crisis, including some technology companies and governmentbonds. These assets have benefited in a world flush with monetary easing but struggling with weak economic growth.
Shares of Amazon.com, Google parent Alphabet and Facebook -- some of the most popular stocks in recent years -- are all down this week, despite the broader market's steep rise.
U.S. bond markets were closed for the Veterans Day holiday, but the yield on the 10-year Treasury note rose to 2.118% Thursday in its largest four-day yield gain since June 2013. Yields rise when prices fall.
Some analysts said the election of Donald Trump this week invigorated this rotation, but that the shift had already started in recent weeks.
"We've been seeing growth firming and inflation expectations picking up globally," said Brian Leung, investment strategist at Bank of America Merrill Lynch.
Data released in late October showed core inflation reached a two-year high in the third quarter.
Similarly, even before Mr. Trump's election, there were discussions among politicians around the world about the potential of using fiscal policy to spark economic growth.
Some analysts said that while Mr. Trump hasn't unveiled specific policies addressing plans for stimulus, investors were still betting that Republican control of the White House and Congress meant some form of government infrastructure spending would pass.
"People are looking at Trump and weighing the two sides of him, and they have inflation in common," said Mr. Leung. He has the "protectionist, antitrade, immigration control side, which could on its own increase inflation. On the other side he has control of Congress, so he has a lot of leeway to cut taxes and implement infrastructure spending."
"For now, the market is pricing in at least a little bit of fiscal stimulus," he added.
Write to Corrie Driebusch at email@example.com
(END) Dow Jones Newswires
November 11, 2016 16:32 ET (21:32 GMT)
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