Stocks rallied Friday, as the high-level trade negotiations between the U.S. and China concluded in Washington. After hitting session highs on the news and rising 500 points, the Dow gave back some of its gains to end Friday’s session. President Donald Trump told reporters in the Oval Office that the U.S. and China completed a “very substantial phase one deal” and said that a phase two will start almost immediately after phase one is signed. The first phase is expected to take about three weeks to sign.
Here’s how the markets settled at the end of regular trading Friday:
S&P 500 (^GSPC): +1.09%, or 32.14 points
Dow (^DJI): +1.21%, or 319.92 points
Nasdaq (^IXIC): +1.34%, or 106.26 points
Crude oil (CL=F): +2.09% to $54.67 per barrel
Gold (GC=F): -0.67% to $1,490.90 per ounce
The president and Chinese Vice Premier’s Friday afternoon meeting followed U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Liu’s meeting earlier in the day. This was the first time since July that the two fueding nations met in-person for negotiations. Investors had been closely monitoring the trade developments because if no progress was made, U.S. tariffs on $250 billion worth of Chinese goods would have increase to 30% from 25% on October 15. According to Mnuchin, the October 15 tariff hike would no longer go into effect. The two sides will be meeting again in five to six weeks in Chile.
Meanwhile, crude oil surged Thursday after Iran said that one of its oil tankers was hit by missiles in the Red Sea. Oil has since pared most of its earlier gains; however, the Friday attack is just the latest in a slew of recent attacks in the region. The concern is that the attack on Iran’s oil tanker will spark more tension in the already tense region. Additionally, the Red Sea is a key global shipping route for oil, as it links the Indian Ocean with the Mediterranean. So far, there has been no claim of responsibility on the attacks.
This all comes after the major attack on Saudi Arabia’s oil infrastructure in September. The fire caused by the attacks left about half of the kingdom’s oil capacity crippled at the time. Production in Saudi Arabia has rebounded relatively quickly following one of the biggest supply disruptions in recent memory, according to the International Energy Agency (IEA).
STOCKS: Roku scores big upgrade; Walmart U.S. gets new CEO
Streaming giant Roku (ROKU) was upgraded to Outperform from Sector Perform by RBC. The firm also raised the price target on the stock to $155 from $107, which represents a 33% move higher from current trading levels. Analyst Mark Mahaney wrote in a note to clients that Roku’s valuation has become compelling again after the recent 31% pullback from its recent highs. “In our July 1st downgrade, we wrote that we would become constructive again on a material stock pullback; the shares have had large swings since then, up as much as 68% intra-quarter, and are now trading ~31% below their recent highs,” Mahaney said. He argued that this was the prime buying opportunity.
Roku shares were under pressure over the past month as the streaming wars were running hot. The announcement of Apple TV+ (AAPL) and Disney+ (DIS) brought out a flurry of Roku bears. As the streaming wars continue, content distributors like Roku and content creators like Disney will have to figure out ways in which to co-exist in a new media era. Shares of Roku have soared 279% in 2019, as of Thursday’s close.
Retail behemoth Walmart (WMT) announced a new CEO will be running its U.S. division. John Furner, who ran Sam’s Club will be replacing Greg Foran starting in February. Foran will be taking on a new role as CEO of Air New Zealand. Foran leaves behind a positive legacy at Walmart and was seen as a key figure in the retailer’s turnaround. Furner started working at Walmart in 1993 as a part-time store associate in the garden department. Walmart shares have been on fire, as the company impresses investors with strong same-store sales growth and online sales momentum. The retailer has bounced back in recent years even as e-commerce giant Amazon (AMZN) threatened to disrupt the entire traditional brick-and-mortar retail landscape. Walmart stock rose 30% so far this year and hit a record high Friday.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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