U.S. stocks traded higher Friday, after opening at new intraday records, as investors attempt to close out a holiday-shortened week on a positive note, a day after a report on strong retail sales helped the Nasdaq to finish above 9,000 for the first time.
How are benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.24% gained 59 points, or 0.2%, to 28,680, the S&P 500 index SPX, +0.13% gained 4 points, or 0.1%, at 3,243, while the Nasdaq Composite index COMP, +0.03% rose 2 points, or less than 0.1%, to 9,024. All three benchmarks set new intraday highs Friday morning.
On Thursday, the Dow rose 105.94 points or 0.37% to 28,621.39, notching its ninth gain of the past 11 trading days to post a year-to-date rise of 22.69%.
The S&P 500 advanced 16.53 points, or 0.51%, to 3,239.91 for a year-to-date return of 29.24%. The Nasdaq rose 69.51 points, or 0.78%, to a record at 9,022.39 after posting a record close for a 10th straight day, the longest such win streak since July 1997. Year-to-date the Nasdaq has risen 35.98%
For the week, the Dow and S&P 500 are both on pace for a gain of 0.6%, while the Nasdaq Composite has gained 1.1% so far this week, as of Thursday’s close.
What’s driving the market?
Stocks drifted higher Friday, setting up the major indexes for a strong end to the week with only two more trading sessions for the year. Investor sentiment has been buoyed by reports of strong holiday sales and a report on Chinese industrial production contributing to some of the year-end bullish sentiment.
“The path of least resistance appears to be higher,” Jeffrey Kravetz, regional investment director at U.S. Bank Private Client Reserve told MarketWatch.
“There are powerful tailwinds pushing investors into risk assets, including consumer sentiment and retail sales figures and central banks around the globe remaining supportive,” he added. “We’ve also seen an easing of trade tensions, and investors are voting with their feet and putting money into the market.”
Reuters reported that profits at China’s industrial firms grew at the fastest pace in eight months in November. Industrial profits in November rose 5.4% from a year earlier to 593.9 billion yuan ($84.93 billion), compared with a 9.9% drop in October. That halted three months of declines, Reuters reported, citing data from the National Bureau of Statistics.
Investors saw the Chinese data as a sign that a slowdown in the world’s second-largest economy, amid a trade policy conflict with the U.S., may not produce as severe a downturn as feared.
The economic report comes after Chinese Commerce Ministry said Thursday that China is in close touch with the U.S. on signing the initial trade pact. President Donald Trump said Tuesday the deal is “getting done,” adding there will be a signing ceremony with Chinese leader Xi Jinping.
To be sure, challenges in striking a partial deal include Beijing reconciling the U.S.’s targeted demands for agricultural purchases of some $200 billion with its current trade relationships in the Asian region and in Europe.
“The trade war … is far from over,” Piotr Matys, FX strategist at Rabobank, wrote in a research note. “In our view, this is just a temporary truce. Another unsolved major issue is Brexit. Geopolitical risk can suddenly resurface.”
Which stocks are in focus?
Tesla Inc. TSLA, +0.06% said it is set to begin deliveries of China-made Model 3 cars on Dec. 30, according to reports. Shares of the electric-car maker were down 0.3%, pulling back after setting a new record high of $435.31 a share at the start of trade.
Apple Inc. AAPL, +0.49% shares rose 0.6%, adding to yesterday’s 2% gain on optimism over its holiday sales, resilient performance in China and opportunities related to the rollout of 5G networks.
Amazon.com Inc. AMZN, +1.49% were up 1.5%, adding to Thursday’s 4.5% gain after claiming it had the best holiday sales season in its history.
Comcast Corp. CMCSA, +0.24% is in talks to buy video-streaming company Xumo, according to the Wall Street Journal. The possible purchase comes ahead of the NBCUniversal parent’s planned launch of its Peacock streaming service. Shares rose 0.2%
Boeing Co. BA, +0.92% said Thursday that longtime general counsel Mike Luttig, a close adviser to ousted CEO Dennis Muilenburg, planned to retire next week as it reshuffles its executive ranks, after Muilenburg’s resignation. The Dow component’s stock advanced 0.8%
Shares of Flexion Therapuetics Inc. FLXN, +12.13% rallied 14% after the company said the U.S. Food and Drug Administration has approved a supplemental new drug application for its Zilretta treatment for osteoarthritis (OA) knee pain that will update the product label.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.10% was down 3.2 basis points at 1.875%. Bond prices rise as yields fall.
West Texas Intermediate crude CL00, -0.06% fell 41 cents, or 0.7% to $61.28 a barrel on the New York Mercantile Exchange.
Gold prices GCG20, +0.20% were relatively flat at $1,515 an ounce on Comex after closing at its highest level since Oct. 31 for a most-active contract on Thursday, marking a third session of gains in a row.
The U.S. dollar was down 0.4% at 97.119, as measured by the ICE Dollar index DXY, -0.50%, a gauge of the buck against six rival currencies.
In Asia overnight, stocks were mixed. The China CSI 000300, -0.10% closed off 0.1%, Japan’s Nikkei NIK, -0.36% fell 0.4%, and Hong Kong’s Hang Seng HSI, +1.30% rallied 1.3%.
Meanwhile, the pan-European benchmark, the Stoxx Europe 600 Index SXXP, +0.20% was headed 0.2% higher on Friday, after being closed the past two sessions for the holidays.
