Stocks on Rise Again Early Friday 01/18 09:46
U.S. stocks are rising again Friday morning as the market wraps up another
strong week with big gains for technology and industrial companies, while banks
rose after more of them posted strong fourth-quarter reports.
NEW YORK (AP) -- U.S. stocks are rising again Friday morning as the market
wraps up another strong week with big gains for technology and industrial
companies, while banks rose after more of them posted strong fourth-quarter
reports. Stock indexes have made big gains since reaching a low point on
Christmas Eve, as the S&P 500 has risen for four weeks in a row. Electric car
maker Tesla stumbled, however, after saying it will cut 7 percent of its jobs.
KEEPING SCORE: The S&P 500 index rose 20 points, or 0.8 percent, to 2,656 as
of 10:25 a.m. Eastern time. The Dow Jones Industrial Average gained 166 points,
or 0.7 percent, to 24,536. The Nasdaq composite added 44 points, or 0.6
percent, to 7,128. The Russell 2000 index of smaller and more U.S.-focused
companies picked up 8 points, or 0.6 percent, to 1,475.
The S&P 500 is on track for its fourth straight weekly gain. It's up 2.3
percent this week and has risen at least 1.9 percent every week during the
rally. It's been a long time since stocks had a similar winning streak:
according to Ryan Detrick of LPL Financial, the last time the S&P 500 rose at
least 1.5 percent a week for four weeks was in early 2009, immediately after
the stock market hit its low point in the wake of the 2007-08 financial crisis
that caused the Great Recession. That streak lasted for six weeks.
WHERE ARE WE NOW?: Stocks sank in late 2018 as investors worried that global
economic growth, and U.S. growth in particular, was going to get worse than
they thought. Threats including the U.S.-China trade dispute, rising interest
rates in the U.S., slowing growth in China and Europe, and unstable political
situations like Brexit all made it seem like 2019 was going to be a
disappointing year. Some investors felt a recession in the U.S. or the global
economy was a possibility in late 2019 or in 2020.
Over the last three weeks, investors have taken a breath and decided things
may not get that bad. The U.S. economy doesn't appear to have slowed much, and
there have been some signs the U.S. and China are making gradual progress in
their trade negotiations. The Federal Reserve has suggested it doesn't plan to
raise interest rates much further in light of slowing growth and the stock
market's recent turmoil. The S&P 500, the main benchmark for U.S. stocks, fell
19.8 percent from late September to late December and has now recovered a
little more than half of those losses.
MACHINE EARNING: Trucking and logistics company J.B. Hunt Transportation
jumped 5.9 percent to $105.67 after its fourth-quarter report, and railroad
company Union Pacific gained 1.8 percent to $157.47. Aerospace giant Boeing
rose 1 percent to $362.59.
Among technology companies, software maker Oracle added 1.2 percent to
$49.17 and chipmaker Broadcom rallied 1.6 percent to $259.34.
BANKS: Financial stocks continued to do better than the rest of the market.
State Street rose 4.2 percent to $74.03 and SunTrust jumped 3.8 percent to
$60.24 following their quarterly reports.
Many large banks reported their fourth-quarter results this week, and
they've benefited from gradually rising interest rates as well as the corporate
tax cut and other tax law changes at the end of 2017. Bank stocks had a bad
year in 2018, in large part because investors weren't sure where interest rates
would go. But the stocks tend to do better when traders feel better about the
health of the economy because when it's growing, businesses and individuals
tend to take out more loans. The S&P 500's index of bank stocks has jumped 8
percent over the last month, while the S&P 500 itself is up 4 percent.
TESLA CUTS: Tesla fell 9.8 percent to $31.33 after the company said it would
cut 7 percent of its jobs. CEO Elon Musk said the cuts are meant to reduce
costs as the company lowers the price for its cars. He said in a note to staff
that the road ahead is "very difficult."
THE SHOE FITS: VF Corp, the maker of brands including Timberland and North
Face, surged 11.4 percent to $81.65 after it raised its forecasts for the year.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.76
percent from 2.74 percent.
US-CHINA TRADE: China said that its economy czar, Vice Premier Liu He, will
visit Washington for talks on Jan. 30-31 aimed at ending the tariff war sparked
by U.S. complaints about Beijing's technology ambitions. Business groups and
economists were looking for Liu and his American counterpart, U.S. Trade
Representative Robert Lighthizer, to take part in talks as a sign lower-level
negotiations earlier in Beijing made progress. The Wall Street Journal reported
Treasury Secretary Steven Mnuchin was willing to roll back U.S. tariff hikes on
Chinese goods, though it said Lighthizer and other officials opposed that idea.
ENERGY: Benchmark U.S. crude jumped 2.6 percent to $53.42 in New York. Brent
crude, used to price international oils, added 1.9 percent to $62.34 a barrel
OVERSEAS: European stocks jumped. Germany's DAX climbed 2 percent and the
FTSE 100 in Britain rose 1.7 percent. The French CAC 40 gained 1.5 percent.
Hong Kong's Hang Seng gained 1.2 percent and the Nikkei 225 in Japan rose
1.3 percent. Seoul's Kospi added 0.8 percent.