Disney shares up after earnings beat
U.S. stocks inched up to close at fresh record highs on Friday, even though President Trump cast doubt on progress in concluding a U.S. trade deal with China after optimism that the long running dispute would be resolved had powered the week’s rally.
The Dow gained for a third straight week while the benchmark S&P 500 index notched a fifth week of gains as the U.S. third quarter earnings reporting season wound down.
How did the major benchmarks perform?
The Dow Jones Industrial Average DJIA, +0.02% added 6.44 points, or 0.02% to close at a new record of 27,681.20, the S&P 500 index SPX, +0.26% advanced 7.90 basis points, or 0.26%, to seize a fresh closing high of 3,093.08. The Nasdaq Composite Index COMP, +0.48% rose 40.80 points, or 0.48%, at 8,475.31, another record.
On Thursday, the Dow and S&P 500 each posted a record close, while the Nasdaq Composite saw its second-highest close in history, according to Dow Jones Market Data.
For the week, the Dow added 1.2% while the S&P 500 gained 0.8% and the Nasdaq advanced 1%.
What drove the market?
Stock markets rallied into the close Friday even amid growing doubts about the willingness of the U.S. to pare import duties in stages as a part of its partial China trade pact, after President Trump told reporters he hasn’t yet approved such a measure.
Peter Navarro, a senior U.S. trade adviser, said late Thursday that there was no formal agreement in place and the final decision would lie with Trump, according to The Wall Street Journal.
But the latest doubts about resolving the trade war were unable to upend the week’s overall stock market rally, which gained steam after China’s Ministry of Commerce said an agreement had been achieved to jointly eliminate some tariffs in stages as a part of the phase-one pact.
“There is a lot of noise that can distract people but when it comes down to it, when you set aside politics and social concerns, markets are driven by fundamentals,” Kevin Philip, managing director at Los Angeles-based Bel-Air Investment Advisors told MarketWatch.
“It’s really hard to have a recession, or some sort of crisis, when you have full employment, a friendly Fed and a government that’s lowering regulations and has lowered taxes,” he said.
Enthusiasm about the ability of the U.S. economy to keep chugging along, despite its record expansion, also has filtered over to the Russell 2000 index RUT, +0.31%, the benchmark for smaller stocks, where a bullish “golden cross” price pattern is starting to take shape and may signal a firmer breakout is on the horizon.
The latest news on the trade dispute came as import and export trade data from China was better than expected, but reflected ongoing struggles for the world’s second-largest economy. Chinese trade data for October show imports fell a less-than-expected 6.4%, while exports, which had been expected to fall 3.9%, only slipped 0.9%.
“Nonetheless the numbers still paint a picture of an economy that is struggling to recover from an economic slowdown and the effects of the current trade impasse,” said Michael Hewson, chief market analyst at CMC Markets U.K. in a Friday research report.
Meanwhile U.S. consumers’ mood brightened in November according to the University of Michigan consumer sentiment index, which rose to 95.7 from 95.5 in October. Economists surveyed by MarketWatch had forecast a reading of 95.
Also on Friday, Federal Reserve Gov. Lael Brainard said the central bank can no longer ignore the economic “shocks” of climate change when formulating policy, while speaking at a San Francisco Fed summit devoted to the topic.
Which stock were in focus?
Shares of Dow component Walt Disney Co. DIS, +3.76% were in focus after the media and entertainment giant late Thursday said it earned $1.05 billion, or $1.07 a share, compared with $2.32 billion, or $1.55 a share, in the year-ago period, while revenue rose 34% to $19.1 billion, from $14.3 billion a year ago. Shares rose 3.7% Friday.
Gap Inc. GPS, -7.64% shares fell 7% after the retailer said Chief Executive Art Peck will step down and guided that fiscal year-end earnings will come in weaker than expected.
Shares of Chesapeake Energy Corp. CHK, -0.70% were being watched after the oil and natural gas company’s top executives bought a total of 125,000 shares on the dip below $1 a share.
Duke Energy Crop. DUK, -2.84% shares closed 2% lower after the utility reported third-quarter earnings that beat expectations, but revenue that fell shy.
Zillow Group Inc. Z, +12.29% reported Thursday evening sales that more than doubled in the third quarter from last year and a better-than-expected loss. Shares were added 12% Friday.
Shares of Take-Two Interactive Software Inc. TTWO, +0.04% closed nearly flat Friday after the videogame publisher missed analysts forecasts for profits and revenue in the third quarter.
Shares of Slack Technologies, Inc. WORK, +0.79% briefly fell to a new low in early trade Friday at $19.70 per share, or about half the stock’s debut price of $38.50 per share on the New York Stock Exchange in June, but closed up.
How did others assets trade?
The yield of the 10-year U.S. Treasury note TMUBMUSD10Y, +1.28% closed higher at 1.930% to register its largest one-week gain since Oct. 11, according to Dow Jones Market Data.
December gold GCZ19, -0.45% on Comex on Friday added to its recent slide for a weekly loss of 3.2% after settling at $1,462.90 an ounce, its sharpest loss in more than two years, according to FactSet data.
West Texas Intermediate crude for December delivery CLZ19, +0.52% ended up 0.2% at $57.24 a barrel on the New York Mercantile Exchange, a weekly gain of 1.9%
The ICE U.S. dollar index DXY, +0.26%, a gauge of the greenback’s performance against six major rivals, was up 0.2%.
In Asia overnight, the China CSI 300 000300, -0.47% fell 0.4%, and the Shanghai Composite SHCOMP, -0.49% declined 0.5%. Hong Kong’s Hang Seng Index HSI, -0.70% fell 0.7%, while Japan’s Nikkei 225 Index NIK, +0.26% added 0.3%.
In Europe, the Stoxx Europe 600’s SXXP, -0.28% traded 0.3% lower.