The S&P 500 finished higher for the second straight week, as a mix of strength from tech stocks and index constituent changes continued to drive the September rally.

Safeway rose 6.1 per cent to $28.20 on Friday after Credit Suisse raised its rating on the company to “outperform” from “neutral”.

The grocery retailer’s shares have gained 25 per cent since news broke in June that it had accepted a $5.7bn offer for its Canadian stores – an offer that was more than double the market capitalisation of the company as a whole.

The Friday boost helped Safeway to move near the top of the S&P’s weekly gainers, up 8.6 per cent on the week.

The S&P 500 gained 0.3 per cent to 1,687.99, putting the benchmark index 2 per cent higher on the week.

Investors continued the week’s strong run from economically sensitive cylical stocks, with the consumer discretionary sector, up 0.8 per cent, leading the day.

Over the week, industrials led the way, up 3 per cent, followed by the consumer discretionary and materials sectors each up 2.7 per cent.

The Nasdaq Composite Index finished up 0.2 per cent to 3,722.18, and the Dow Jones Industrial Average was better by 0.5 per cent to 15,376.06.

The Dow was the best performing major index on the week, up 3 per cent – its best week since the beginning of 2013. The Nasdaq, which had steadily outperformed the Dow and the S&P as of late, was up 1.7 per cent on the week.

Intel added 3.6 per cent to $23.44 after investment bank Jefferies upgraded the stock to “buy” from “hold”. The chipmaker is off 3 per cent in the past 12 months as it attempts to diversify its business away from making chips for PCs, which have been mired in a sales slump.

What had previously been expected to be a big week for Apple finished with its stock off more than 6.5 per cent.

The much-anticipated release of new iPhones on Tuesday and the lack of an announced deal with China Mobile disappointed analysts and investors. Apple shares were 1.7 per cent lower on Friday to $464.90.

News of Delta’s addition to the S&P 500 drove the company’s shares up 13 per cent on the week to $22.47. The airline joined the index on Tuesday, the culmination of a concerted effort from company management to repair the finances of the second-biggest US airline by revenues.

Nike, Visa, and Goldman Sachs also received a boost from news that they will replace Alcoa, Bank of America, and Hewlett-Packard in the Dow Jones Industrial Average

The move will replace three companies with low share prices with much more highly priced stocks. The Dow is a price weighted index, meaning that a company like Alcoa, which currently trades at $8.08, will have little impact even if it sees a 50 per cent swing.

Nike added 4.5 per cent to $67.91, Goldman Sachs gained 4.7 per cent to $164.00, and Visa rose 7 per cent to $189.00 on the week.

Netflix and Facebook each hit record highs during the week as positive analyst notes boosted each of the companies.

Netflix is up 4.8 per cent on the week after RBC Capital Markets and Morgan Stanley increased price targets for the content streaming company, which is now 230 per cent higher in 2013.

Facebook received a vote of confidence from JPMorgan Securities, which put a price target of $53 on the company’s shares. The social network hit an intraday record high of $45.62 on Thursday, and closed at $44.31 on Friday, up 0.8 per cent on the week.

Friday’s uptick mean the S&P 500 has logged gains in nine of the 10 September trading days. The most recent similar run was a stretch of 12 positive days out of 13 in July, which led into the early August highs that included a breach of the 1,700 level.

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