In­dus­trial com­pa­nies lead US stock in­dexes mostly higher

Kuwait Times - - BUSINESS -

Wall Street closed out the fi­nal day of the se­cond quar­ter with slight gains af­ter a broad rally faded in the last few min­utes of trad­ing Fri­day. The Dow Jones in­dus­trial av­er­age and the Stan­dard & Poor’s 500 in­dex eked out tiny gains, while the Nas­daq com­pos­ite closed es­sen­tially flat. In­dus­trial stocks and con­sumer-fo­cused com­pa­nies led the gain­ers. En­ergy stocks also rose as crude oil prices closed higher for the sev­enth straight day. Util­i­ties, tech­nol­ogy and health care com­pa­nies were among the big­gest de­clin­ers.

Trad­ing was mostly sub­dued ahead of the In­de­pen­dence Day hol­i­day next week, though many in­vestors seized on the fi­nal trad­ing day of the quar­ter and the pre­vi­ous day’s mar­ket slide to buy more shares or close out po­si­tions and book prof­its. “Over­all we’re end­ing this quar­ter with a strong mar­ket, even though tech­nol­ogy has taken a hit, other sec­tors have moved up,” said Quincy Krosby, chief mar­ket strate­gist at Pru­den­tial Fi­nan­cial.

The S&P 500 in­dex rose 3.71 points, or 0.2 per­cent, to 2,423.41. The Dow gained 62.60 points, or 0.3 per­cent, to 21,349.63. The Nas­daq lost 3.93 points, or 0.1 per­cent, to 6,140.42. The Rus­sell 2000 in­dex of small-com­pany stocks gave up 0.84 points, or 0.1 per­cent, to 1,415.36. Bond prices fell. The 10-year Treasury yield rose to 2.30 per­cent from 2.27 per­cent late Thurs­day.

Shaky start

The ma­jor stock in­dexes got off to a shaky start early Fri­day, but soon veered higher and held course for much of the day. A last-minute flurry of sell­ing nudged the Nas­daq and Rus­sell 2000 slightly into the red. The Dow, S&P 500 and Nas­daq ended the week in neg­a­tive ter­ri­tory. This was also the worst week of the year for the Nas­daq and the third loss in the last four weeks for the tech-heavy in­dex. The mar­ket’s snap­shot at the half­way mark for 2017 is more en­cour­ag­ing, how­ever.

The S&P 500 in­dex, the broadest mea­sure of the stock mar­ket, is up 8.2 per­cent this year, while the Dow is up 8 per­cent. The Nas­daq has racked up a gain of 14.1 per­cent. The Rus­sell 2000 is up 4.3 per­cent. Strong cor­po­rate earn­ings and rev­enue have un­der­pinned the mar­ket’s gains this year. Ex­pec­ta­tions among in­vestors that Pres­i­dent Don­ald Trump and the Repub­li­can-led Congress would slash taxes, boost fed­eral spend­ing on in­fra­struc­ture and en­act other busi­ness-friendly poli­cies have also helped drive stocks higher. In­vestors ap­peared to tem­per those ex­pec­ta­tions in re­cent weeks as the Trump ad­min­is­tra­tion hit leg­isla­tive snags in its bid to pass a health in­sur­ance over­haul. On Thurs­day, S&P Global Rat­ings noted that sentiment on Wall Street, which had been strong fol­low­ing Trump’s elec­tion, has be­gun to soften. “Now, we no longer be­lieve the fed­eral gov­ern­ment will be able to push through even a small in­fra­struc­ture-spend­ing pack­age, and we ex­pect only mod­er­ate tax cuts to be passed early next year as midterm elec­tions ap­proach,” wrote Beth Ann Bovino, S&P Global’s US chief econ­o­mist.

Re­marks from cen­tral bank of­fi­cials in Europe ear­lier this week helped set the tone for the mar­ket, spurring spec­u­la­tion among in­vestors that global in­ter­est rates could move higher. That sent bond yield sharply higher and helped lift shares in banks. Traders also sold off tech­nol­ogy stocks. The sec­tor had its worst week this year.

Tech­nol­ogy leads other sec­tors

Even so, tech­nol­ogy still leads all other sec­tors. It’s up 16.4 per­cent this year, fol­lowed by health care and con­sumer dis­cre­tionary stocks. En­ergy stocks are the big­gest lag­gard at the mid­point of the year, down 13.8 per­cent. Phone com­pa­nies are also in the red. On Fri­day, in­vestors sized up the lat­est com­pany earn­ings and deal news. The Com­merce Depart­ment said con­sumer spend­ing grew just 0.1 per­cent in May, less than the last cou­ple of months. Per­sonal in­come grew by a healthy 0.4 per­cent, but spend­ing only rose 0.1 per­cent. —AP

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