Markets closed in the green on Friday as optimism around a U.S. - China trade deal boosted investor sentiment. Further, China’s pledge to counter its economic woes also boosted indices. The three major benchmarks closed the day as well as the week in the positive territory. Meanwhile, U.S. consumer sentiment nudged higher in March.
The Dow Jones Industrial Average (DJI) increased 0.5%, to close at 25,848.87. The S&P 500 increased 0.5% to close at 2,822.48. The tech-laden Nasdaq Composite Index closed at 7,688.53, gaining 0.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 2.7% to close at 13.13. Advancers outnumbered decliners on the NYSE by a 1.63-to-1 ratio. On Nasdaq, a 1.54-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow amassed 138.9 points to end the session in positive territory. Gains for the 30-stock index were buoyed by a 1.5% surge in the shares of Boeing BA after reports surfaced that the aerospace giant was planning to initiate a software upgrade for its 737 Max model. Boeing carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 14 points to also end in the green. Of the 11 major sectors of the S&P 500, five ended in the positive territory, with technology leading the advancers. The Technology Select Sector SPDR ETF (XLK) increased 0.9% on Friday. Meanwhile, the Nasdaq increased 57.6 points to close in the positive territory. Gains for the tech-laden index were buoyed by a broad-based rally in tech shares.
U.S. - China Trade Summit to be Delayed
Market watchers played down comments from Chinese Premier Li Keqiang that a trade deal between his country and the United States might occur ‘several weeks’ later. Li remained optimistic that a trade deal would soon be reached between both the countries and which would be in accordance with the needs of both the parties. Meanwhile Trump described China as a “very responsible and reasonable” country.
Speaking to reporters post a U.S. Senate Finance Committee hearing on Thursday, Treasury Secretary Steven Mnuchin stated that no date whatsoever had been fixed for a meeting between President Donald Trump and China’s Xi Jinping. He further stated that “there’s still a lot of work to do” before an agreement is reached.
China’s Efforts to Counter its Economic Woes
Chinese Premier Li Keqiang also vowed to take necessary measure to stimulate the weakening Chinese economy. The leader stated that steps such as lowering of the interest rates, slashing the bank reserve ratios as well as reducing taxes for consumers and businesses would boost the country’s economy. Such developments led to speculation that stability in the Chinese economy could help counter the current global economic slowdown.
On the economic data front, U.S. industrial production for the month of February increased 0.1%, falling behind the consensus estimate of 0.4% for the month. Meanwhile, capacity utilization for February came in at 78.2%, lower than the consensus estimate of 78.5%.
The New York Fed’s Empire State index declined to 3.7 in March from 8.8 in February. This marked a near two-year low. Meanwhile, the Labor Department reported that job openings in the United States hit 7.58 million in January, its third-highest level ever recorded.
The University of Michigan reported that its consumer sentiment index rose to 97.8 in March from 93.8 in February.
For the week, the Dow, the S&P 500 and the Nasdaq increased 1.6%, 2.9% and 3.8%, respectively. While, this was the Dow’s best weekly gain since Feb 15, the S&P 500 recorded its best weekly advance since Nov 30. Meanwhile, the Nasdaq reported its best week of gains since Dec 28.
Investors remained anxious about the delay in sealing a U.S. – China trade deal. Moreover, weak earnings data from the United States and China also dented investors’ confidence. Meanwhile, the UK parliament voted against a no-deal Brexit and President Donald Trump said that he was ready to give more time for a trade deal to be concluded with China.
In other news, Fed chair Jerome Powell remained bullish about the U.S. economy. On Mar 10, in an interview with “60 Minutes”, Fed chairman Jerome Powell said that the U.S. economy will continue to grow in 2019 albeit at a slower pace.
Stocks That Made Headlines
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Eni SpA E has released its strategic plan for 2019-2022, which reflects the usual progress from the same executed in the previous years. (Read More)
Southwest Inks Tentative Deal With AMFA: What's Ahead?
Southwest Airlines LUV inked a tentative labor deal with the Aircraft Mechanics Fraternal Association (“AMFA”) — the union representing 2,400 mechanics at this low-cost carrier. (Read More)
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