Small-cap stocks shine on otherwise ho-hum day
U.S. stocks hardly moved Friday as the market wrapped up a solid week. Smaller firms rose following signs of sustained economic growth and reports that more tariffs on Chinese goods could be on the way.
Stocks rose in early trading after the Federal Reserve said production of cars and energy jumped in August. The Commerce Department said sales by retailers grew slightly in August after a big gain in July.
Bond yields jumped Friday as investors interpreted the Fed report as a sign the economy will keep growing and interest rates will keep rising. That helped bank stocks but hurt stocks that pay high dividends.
Retail and healthcare stocks also took small losses.
The Standard & Poor’s 500 index rose 0.80 of a point to 2,904.98. It rose all five days this week after a fourday losing streak last week.
The Dow Jones industrial average edged up 8.68 points, to 26,154.67. The Nasdaq composite slipped 3.67 points, to 8,010.04.
The mix of trade worries and positive economic news helped smaller firms, which tend to do more business in the United States than larger ones. That makes them less vulnerable to flare-ups in trade tensions. The Russell 2000 index climbed 7.40 points, or 0.4%, to 1,721.72.
Bloomberg News reported President Trump told aides to go ahead with tariffs on $200 billion worth of imports from China. The report said the administration may be having difficulty finding products it can tax that won’t result in major complaints from consumers and businesses.
China said Thursday that the United States had reached out to open a new round of trade talks. The new round of tariffs would represent a major escalation in the U.S.-China conflict.
Industrial firms rose after the Fed’s report. Aerospace firm Boeing advanced 1.2% to $359.80, and shipbuilder Huntington Ingalls climbed 1.6% to $252.90.
The industrial data are a sign the U.S. economy is likely to keep growing, which means the Fed is likely to continue raising interest rates. It is expected to raise interest rates this month, the third increase this year out of an expected four.
The yield on the 10-year Treasury note rose to 2.99% from 2.96%.
Banks and financial companies rose as higher longterm interest rates help them make more money from loans. Prudential Financial shares climbed 2.9% to $99.86.
A series of gas explosions killed one person, injured at least 10 and forced evacuations in three communities north of Boston. A state agency blamed the fires on gas lines served by a unit of NiSource. NiSource’s stock dived 11.7% to $24.79.
Hurricane Florence came ashore in North Carolina on Friday morning. Although it could do significant damage to the region, it’s not expected to have a big effect on the overall economy. Economists at IHS Markit said the hurricane might slow growth in the third quarter a bit but would probably contribute to growth in the fourth quarter.
Shares in Canadian marijuana company Tilray slumped after Politico reported that the U.S. Customs and Border Patrol may ban people who work in the marijuana industry from entering the country. Tilray slumped 8.9% to $109.05.
Benchmark U.S. crude rose 0.6% to $68.99 a barrel. Brent crude fell 0.1% to $78.09 a barrel. Wholesale gasoline fell 1.1% to $1.97 a gallon. Heating oil fell 0.6% to $2.21 a gallon. Natural gas slid 1.8% to $2.77 per 1,000 cubic feet.