U.S. stocks finished mostly higher Friday, with the major benchmarks posting strong weekly gains and a strong finish in August.
The day’s action comes ahead of a three-day weekend for U.S. investors with equity gauges hovering in record territory. U.S. markets will be closed on Monday for Labor Day.
Where are the major benchmarks trading?
The Dow Jones Industrial Average DJIA, -0.09% declined 22.10 points to 25,964.82, a fall of less than 0.1%, but finishing well off its low of the session.
Meanwhile, the S&P 500 index SPX, +0.01% closed the day virtually flat, with a gain of less than a point to 2,901.52, while the Nasdaq Composite Index COMP, +0.26% rose 21.17 points, or 0.3%, to close at 8,109.54, on the back of a record rally for shares of Apple Inc.
For the week, the Dow rose 0.7%, the S&P climbed by 0.9%, and the Nasdaq gained 2.1%. Looking at all of August, the Dow put on 2.2%, the S&P added 3%, and the Nasdaq climbed 5.7%.
Both the Dow and the S&P notched their third straight weekly advances, while the Nasdaq booked its second straight positive week and its best August return since 2000.
For the S&P and the Nasdaq it was the best August performance since 2014, with indexes notching a fifth positive month in a row, while the Dow has gained for two straight months.
What’s driving the market?
Trade negotiations between the U.S. and international trade partners have been the source of volatility on Wall Street and that narrative was no different on Friday, marking the final session of the week and August.
The Wall Street Journal late Friday indicated that talks between the U.S. and Canada had broken off with no agreement before an unofficial White House deadline of Friday. The U.S. Trade Representative’s office cited “progress” in talks that were “constructive” to revise the North American Free Trade Agreement. It said talks would resume on Wednesday.
Trump sent a formal notice to Congress stating that he still intends to sign a revised version of Nafta by late November. That statement is likely to say he is willing to proceed only with Mexico, but that he is also open to continuing negotiations with Canada.
On the economic front, the August Chicago purchasing managers index came in at 63.6, compared with estimates for a reading of 63.8. Still, the data were above the July reading of 65.5. Any reading above 50 indicates improving conditions.
Meanwhile, the final reading of the University of Michigan’s consumer-sentiment index in August was 96.2, below July’s level of 97.9, but above estimates for 95.5. Despite the improvement, the sentiment level is at its lowest level since January.
Elsewhere, investors were focused on emerging markets, including Turkey and Argentina, which are both embroiled in currency crises that Wall Street fears could have knock-on effects across the globe. However, some optimism could be drawn by Friday developments where the International Monetary Fund said Argentina has its “full support” as it grapples with a financial crisis that sparked a plunge its peso USDARS, -4.7139%
What are market analysts saying?
Brad McMillan, CIO at Commonwealth Financial Network said investors view the market as resilient and are optimistic about the outcome in trade talks.
“I think the big thing is markets are obviously pulling back on risk but everything that has happened so far that risk has turned out to be not as bad as people thought,” said McMillan. “We now have a deal with Mexico and I think chances are we will have a deal with Canada,” he said.
“I think that people are generally very optimistic about the economy and all the data we’re getting is just an affirmation that things are doing well in the U.S.,” said Karyn Cavanaugh, senior market strategist at Voya Financial. She cautioned though that “the biggest worry now is that the rest of the world isn’t keeping up.”
What stocks are in focus?
Coca-Cola Co. KO, -0.85% said it would buy British coffee-shop chain Costa for $5.1 billion. The Dow component is buying the chain from Whitbread PLC WTB, +14.33% Shares of Coke ended down 0.9%, while those for U.K.-listed Whitbread finished up 14%.
Lululemon Athletica Inc. LULU, +13.09% late Thursday reported second-quarter earnings that beat expectations. It also raised its full-year outlook. The stock closed up 13.1% on the day and has been a strong performer in 2018, up nearly 100% thus far this year.
American Outdoor Brands Corp. AOBC, +43.60% the parent company of Smith & Wesson, late Thursday reported results that topped analyst expectations. Shares surged by nearly 44%.
Shares of Big Lots Inc. BIG, -10.05% fell 10% after the retailer reported its results and gave an outlook.
Ulta Beauty Inc. ULTA, +6.38% late Thursday gave a third-quarter earnings outlook that was below analyst forecasts. Shares of the beauty-products company rose by 6.4%.
Nutanix Inc. NTNX, -7.40% late Thursday forecast a wider-than-expected loss for its first quarter. Shares of the cloud-computing company were off 7.4%.
Shares of Apple AAPL, +1.16% rose 1.2%, hitting a record on Friday and notching their best monthly gain since 2009, up 19.6%, according to Dow Jones Market Data. On Thursday, Warren Buffett told CNBC that he had acquired more shares of the iPhone maker.
