Stocks Waver but Remain Poised for Weekly Gains
09 November 2019 - 3:18AM
Dow Jones News
By Will Horner and Gunjan Banerji
Global stocks slipped Friday but remained on track to finish the
week with gains as investors awaited progress between the U.S. and
China on trade.
The Dow Jones Industrial Average fell about 49 points, or 0.2%.
The S&P 500 slipped 0.1%. The Nasdaq Composite was little
changed. All three indexes are on track for weekly gains of at
least 0.5%.
The week has been dominated by trade headlines, sending stock
and bond yields sharply higher despite Friday's modest moves. The
Dow breached its first new high since July, while the S&P 500
and Nasdaq also touched records.
Investors also grew more confident about economic growth, piling
into shares of cyclical stocks during the week and unraveling bets
on safer investments like Treasurys. Shares of financials and
energy companies in the S&P 500 have been some of the biggest
winners this week.
The yield on the 10-year Treasury note closed at its highest
level since July as bond prices fell. A bond market signal that had
previously been flashing red that a recession is coming has eased
up.
"To me interest rates and Treasurys are leading a lot. They're
leading a lot of the capital allocation. They're leading a lot of
the rotation," said Jason Brady, chief executive of Thornburg
Investment Management. Mr. Brady said that he's optimistic about
the prospects for banks like JPMorgan Chase & Co.
Still, some of the enthusiasm lifting stocks earlier in the week
waned Friday, highlighting the impact of trade sentiment on stock
and bond investors.
Although markets had begun betting that a partial trade deal
would be accompanied by a rolling-back of existing tariffs,
President Trump said Friday that the U.S. hadn't committed to
offering such concessions.
"Until we actually see some type of trade deal, the level of
uncertainty -- which ultimately will translate into volatility in
the market -- will persist," said Brian O'Reilly, head of
investment strategy at the Dublin-based Mediolanum International
Funds. "Today, we are just seeing a bit of a recalibration of that
over-optimism from a news headline without any hard facts."
Adding to enthusiasm among, earnings have largely been better
than investors had expected.
Walt Disney shares climbed 4.2% after its earnings beat
analysts' expectations.
Gap slumped about 8% after the apparel maker pared its profit
targets for the year and said Chief Executive Art Peck would step
down immediately.
Oil prices also slipped as the cautious mood on the U.S.-China
trade spat spilled over into investors' assessment of the global
economic outlook. Brent crude, the global oil benchmark, fell about
2%.
Global markets have also been buoyed lately by signs that a U.S.
recession isn't imminent. Consumer confidence ticked higher in
early November. The University of Michigan said Friday that its
preliminary index of November consumer sentiment was 95.7, up
slightly from 95.5 at the end of October.
The Stoxx Europe 600 fell 0.3%. Stocks in Asia also pulled back
but capped off a second consecutive week of gains. The Hang Seng
declined 0.7% and the Shanghai Composite Index lost 0.5%.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
November 08, 2019 11:03 ET (16:03 GMT)
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