Stocks rise ahead of holiday, trade fears take temporary backseat

In This Article:

Stocks rose Friday on low trading volume, as investors took a momentary respite from worries about the U.S.-China trade war, which have dragged down major indexes this week.

The S&P 500 (^GSPC) increased 0.14%, or 3.82 points, as of market close. The Dow (^DJI) rose 0.37%, or 95.22 points, while the Nasdaq (^IXIC) rose 0.11%, or 8.73 points.

Over the past several days, trade-related headlines and a bevy of misses on quarterly earnings expectations from major retailers weighed on blue-chip and technology shares. Despite Friday’s gains, each of the three major indices was lower for the week, with the S&P 500 off by about 1.1%.

On Thursday, President Donald Trump said that Huawei could be a component of an eventual trade pact with China, hinting at a potential roll-back on the tough restrictions against doing business with the Chinese tech giant. That would dent supply chains for a spate of U.S. firms.

“It’s possible that Huawei even would be included in some kind of a trade deal,” Trump told reporters, according to Bloomberg News.

Risk assets were bid ahead of Monday’s holiday, which included West Texas Intermediate crude oil (CL=F). Energy was rebounding from its biggest drop of the year Thursday, with investors worried that the U.S.-China trade dispute could hammer global demand for oil.

Meanwhile, prices for some safe haven assets fell. The yield on the 10-year Treasury note, which moves inversely to the price, rose by about 3 basis points, and gold prices declined.

Overseas, European stocks and sterling jumped after U.K. Prime Minister Theresa May announced that she will resign as Britain’s prime minister on June 7, leaving an opening for a new leader to take over the Brexit process.

In her exit speech, May said she had “done her best” to deliver the results of the 2016 European Union referendum. May will remain in her position until a successor is chosen in mid-July.

The FTSE 100 (^FTSE) closed 0.65% higher to 7,277.73 in Europe, while the British pound (GBPUSD=X) broke above $1.27 against the U.S. dollar.

STOCKS

Foot Locker (FL) shares tumbled 16% Friday after missing expectations in first-quarter results delivered before the bell.

First-quarter adjusted earnings per share (EPS) of $1.53 missed expectations by 7 cents, according to estimates compiled by Bloomberg. Comparable same-store sales rose just 4.6%, versus an increase of 5.5% expected, and revenue of $2.08 billion fell short of estimates for $2.11 billion.

Shares of Nike (NKE) and Adidas (ADS.DE) – both brands that Foot Locker carries – also fell in pre-market trading, in sympathy with Foot Locker’s earnings miss.