Stocks end week with gains; Dow tops 25,000
Stocks wrapped up another solid week Friday as industrial and energy firms ticked higher, but corporate earnings got off to a sluggish start as reports from several major U.S. banks failed to excite investors.
Indexes wobbled in morning trading, but rising oil prices helped energy companies, and defense contractors and machinery makers rose. Consumer-focused companies such as Amazon set record highs.
Wells Fargo skidded after reporting a drop in earnings. Citigroup fell after posting weak revenue growth. AT&T dropped after the Justice Department asked a court to overturn a ruling that allowed the company’s purchase of Time Warner.
Investors expect another round of great profit growth this quarter, but they’re not sure about what will come next: The United States and China are in a trade war without any signs of resolution, midterm congressional elections are nearing, and interest rates keep rising.
Paul Christopher, of the Wells Fargo Investment Institute, said investors will focus on corporate forecasts covering the rest of the year. “We still think the economy is really what investors should be watching here, and we think it’s going to be solid this year and again good next year.”
The Standard & Poor’s 500 index rose 3.02 points, or 0.1%, to 2,801.31. The Dow Jones industrial average rose 94.52 points, or 0.4%, to 25,019.41. The Nasdaq composite set another record, just barely, as it rose 2.06 points to 7,825.98. The Russell 2000 index of smallercompany stocks fell 3.20 points, or 0.2%, to 1,687.08.
Major indexes rose for the second week in a row following modest losses over the previous two weeks. Investors continued to waver between optimism about the growing U.S. economy (and the strong company earnings that come with it) and worries that the trade war and other commercial disputes could set back global economic growth.
Wells Fargo posted a smaller profit than analysts expected. Its stock fell 1.2%, to $55.36. Citi fell 2.2%, to $67, and JP Morgan Chase slipped 0.5%, to $106.36.
While bank profits are surging this year, their stocks are not. Much of the profit growth has come from last year’s corporate tax cuts rather than a big improvement in the banks’ businesses. Investors have also worried about the shrinking gap between short-term interest rates and longer-term ones because banks make a lot of their money by borrowing money at short-term rates and lending it out over the long term.
Investors are more optimistic about technology companies and retailers, which are expected to post even stronger earnings growth this summer. On Friday, Amazon rose 0.9%, to $1,813.03. Microsoft advanced 1.2%, to $105.43.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.83% from 2.85%.
Gold fell 0.4%, to $1,241.20 an ounce. Silver fell 1%, to $15.82 an ounce. Copper slipped 0.1%, to $2.78 a pound.
Copper futures have fallen for five straight weeks, down 16% over that time, a sign that investors are worried the trade war will impair construction, manufacturing and power generation.
Benchmark U.S. crude rose 1%, to $71.01 a barrel. Brent crude rose 1.4%, to $75.33 a barrel. Wholesale gasoline rose 1.7%, to $2.11 a gallon. Heating oil rose 0.5%, to $2.13 a gallon. Natural gas sank 1.6%, to $2.75 per 1,000 cubic feet.
The dollar rose to 112.30 yen from 112.46 yen. The euro rose to $1.1677, from $1.1670.