Closing Market Summary: Positive Trade Headlines Fuel Late UptickThe S&P 500 advanced 0.3% on Friday, securing a weekly gain of 0.6%, helped by a Wall Street Journal report that Chinese and U.S. negotiators are planning talks to try to end their trade disagreement ahead of multilateral meetings between President Trump and President Xi in November. The Dow added 0.4% on Friday, and the Nasdaq ticked up 0.1%.
Friday's gains were broad-based, with all 11 S&P sectors closing in the green. The industrials (+0.6%), materials (+0.7%), consumer staples (+0.7%), and real estate (+1.0%) sectors were the top performers, while consumer discretionary (+0.1%), financials (+0.2%), and technology (+0.2%) finished at the back of the pack.
Stocks opened roughly flat and stayed largely unchanged until the afternoon when the WSJ report crossed the wires, pushing the market to new highs.
In corporate news, Tesla (TSLA 305.50, -29.95) tumbled 8.9% following a New York Times interview with its CEO, Elon Musk, in which he discussed his personal struggles, calling this past year "the most difficult and painful" of his career. The NYT also reported that some of Tesla's board members are concerned over Mr. Musk's use of Ambien and recreational drugs.
On the earnings front, NVIDIA (NVDA 244.82, -12.62) and Applied Materials (AMAT 43.77, -3.66) tumbled 4.9% and 7.7%, respectively, after they reported worse-than-expected guidance, which overshadowed their better-than-expected earnings. The Philadelphia Semiconductor Index lost 0.7%.
Conversely, Nordstrom (JWN 59.18, +6.90) spiked 13.2% after reporting above-consensus earnings and guidance for FY19, and Deere (DE 140.59, +3.24) climbed 2.4% despite missing bottom-line estimates and issuing below-consensus guidance for the current quarter.
Away from stocks, the Turkish lira lost 3.6% against the U.S. dollar, ending its three-session rebound, and U.S. Treasuries spent most of the day in the green, but finished the session little changed. The yield on the benchmark 10-yr Treasury note finished flat at 2.87%.
Reviewing Friday's economic data, which included July Leading Indicators and the preliminary reading of the University of Michigan Consumer Sentiment Index for August:
- The Conference Board's Leading Economic Index increased 0.6% in July (consensus +0.5%), and the June reading was left unrevised at +0.5%.
- The key takeaway from the report is that it points to a sustained pace of economic expansion for the foreseeable future.
- The preliminary reading of the University of Michigan Consumer Sentiment Index for August slipped to 95.3 (consensus 97.8) from 97.9 in July.
- The key takeaway from the report is that the overall decline was driven by concerns about the prices of large household durables.
Looking ahead, investors will not receive any economic data on Monday.
- Nasdaq Composite +13.2% YTD
- Russell 2000 +10.3% YTD
- S&P 500 +6.6% YTD
- Dow Jones Industrial Average +3.8% YTD