U.S. stocks rose slightly on Friday, with technology stocks leading the day’s advance following strong results from Microsoft, one of the industry’s most closely watched bellwethers.
Major indexes inches higher throughout the session, erasing an early decline that came as new questions surrounding government policy on both trade and the dollar cooled buying appetite.
What are the main benchmarks doing?The Dow Jones Industrial Average DJIA, +0.18% rose 41 points, or 0.2%, to 24,106. The S&P 500 index SPX, +0.13% was up 4 points to 2,808, an increase of 0.1%. The Nasdaq Composite Index COMP, +0.36% COMP, +0.36% COMP, +0.36% which has an outsize exposure to large tech stocks, was up 33 points to 7,858, a gain of 0.4%.
For the week, the Dow is up 0.3% while the S&P is up 0.2%. The Nasdaq is up 0.4%. All three are on track for their third straight weekly advance.
What’s driving markets?In an interview with CNBC, President Donald Trump said he was “ready” to put tariffs on all Chinese goods imported to the U.S., which would amount to more than $500 billion. The comments were the latest in a series that pointed to worsening trade relations; on Thursday, Trump threatened “tremendous retribution” against the European Union and stood by a pledge to levy tariffs on automobile imports.
While corporate profits on the rise and economic data steady, if not strong, investors are concerned that the trade tensions could escalate into a full-scale trade war, which could hurt growth, business spending, and sentiment.
On Friday, The Wall Street Journal reported that Republican Sen. Orrin Hatch sent a letter to the White House this week warning President Trump against a continued pursuit of import tariffs.
Don’t miss: Trade tariffs mean companies will spend less on growing their business in 2019, says Fitch
Also: Trade uncertainty prompts spike in investor caution
In an excerpt of the CNBC interview released Thursday, Trump said he’s “not thrilled” that the Federal Reserve is hiking interest rates as that could undermine his administration’s fiscal stimulus efforts.
On Friday, Trump called China and the European Union currency and interest rate manipulators in a tweet. The U.S. dollar index DXY, -0.57% fell 0.6% following the tweet.
In the latest earnings news, General Electric Co. GE, -4.81% tumbled 4.2% in heavy trading after it reported earnings and revenue that beat expectations. The industrial conglomerate, in an earnings call, said it expects its GE Capital division to be break-even for the year, and that it was working with an assumption of a challenging power market beyond 2019, saying the division would require a “multiyear” fix.
The results come after a tumultuous year for the industrial conglomerate that included a leadership change, a halved dividend and its removal as the longest tenured component of the Dow. It is down 25% year to date.
Microsoft Corp. MSFT, +2.62% late Thursday posted fiscal fourth-quarter results that topped Wall Street’s expectations and issued a stronger-than-expected outlook for the first quarter. Shares climbed more than 2.7% and were among the biggest boosts on the day.
See: Microsoft shows it deserves place among tech giants
What are strategists saying?“Overall market fundamentals look pretty good. This should be a good earnings season, but a lot of that is built into prices, so it’s hard to see significant upside from even, even as the strength prevents significant downside,” said Mike Dowdall, an investment strategist and portfolio manager at BMO Global Asset Management.
“There’s certainly plenty to be concerned about on the political front, but at the moment economics are trumping noise.”
Dowdall said he was watching Trump’s recent comments and tweets, but that “generally speaking this is something to ignore. We’ve been whipsawed so many times on his tweets that there’s a healthy dose of skepticism around them. But there’s definitely a concern that he could sway public opinion, and who knows how that’s factor into markets.”
Which stocks are in focus?Credit-card provider Capital One Financial Corp. COF, +3.51% advanced 3.1% following its results late Thursday, while chip companySkyworks Solutions Inc. SWKS, -4.83% lost 5.2% following its own. Medical robots pioneerIntuitive Surgical Inc. ISRG, +1.07% rose 1.6% after its earnings topped forecasts late Thursday.
Facebook Inc. FB, +1.32% rose 1.4% after analysts at Stifel and Piper Jaffray raised their price targets ahead of the company’s July 25 earnings report.
Skechers USA Inc.’s stock SKX, -23.64% plunged 23% after the shoemaker’s results and outlook disappointed.
VF Corp. VFC, +4.06% reported adjusted first-quarter earnings that beat expectations, along with revenue that came in ahead of forecasts. The stock gained 4.1%.
Schlumberger NV SLB, -0.03% reported adjust second-quarter earnings that beat expectations, but revenue that was slightly below forecasts. Shares rose 0.7%.
Honeywell Inc. HON, +3.89% gained 3% after it topped analyst expectations and raised its outlook.
Shares in FTD Cos. FTD, -15.71% dropped 14% after the beleaguered florist said late Thursday that its chief executive, chief operating officer and chief marketing officer are departing, and it’s restructuring and reviewing strategic alternatives.
What are other markets doing?European stocks SXXP, -0.09% were mostly lower and while Asian stocks ended higher, on balance. Oil futures CLQ8, +0.58% advanced, while gold futures GCQ8, +0.37% gained some ground as the U.S. dollar weakened.
