Stocks end week with gains; Dow tops 25,000

Los Angeles Times - - BUSINESS BEAT - As­so­ci­ated press

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.

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