US stocks closed higher on Friday as a lull in US/China trade tensions helped offset disappointing quarterly results from some of the US's largest banks. Led by gains in the beaten-down industrial sector, the Dow Jones Industrial Average and S&P 500 pierced psychological resistances at 25,000 and 2,800, respectively, while the Nasdaq set another record high. All three were higher for a second consecutive week with the Dow up 2.3%, the S&P higher by 1.4% and the Nasdaq gaining 1.8%.
Stock futures were defensive at Friday's open after China's record high trade surplus with the US briefly rekindled trade tensions, while disappointing earnings from Wells Fargo ( WFC ) and Citigroup ( C ) introduced selling pressure on the banking sector, compromising early gains for JP Morgan ( JPM ). After a fitful start, the major averages gained traction thanks to strength in the energy complex and regained its upward momentum from Thursday.
Struggling to stay positive, the high-flying Nasdaq came under pressure late Friday after Amazon's plan to move into the networking space chased Cisco ( CSCO ), Juniper ( JNPR ) and Arista Networks (ANET) sharply lower. Cisco, a component on the Dow, Nasdaq and S&P 500 fell dangerously close to its 200-day moving average for the first time in nearly a year, plaguing the Nasdaq for the remainder of the session.
The markets were unmoved by most of the day's headlines that included President Trump's visit to the UK where he backpedalled on harsh comments about UK prime minister Theresa May; the DOJ's indictment of 12 Russian agents for hacking the Democratic National Committees' emails; and comments from Fed president's Raphael Bostic and Rob Kaplan.
Data released this morning showed a 0.4% drop in import prices while export prices were up by 0.3%.
Persistent fears of a trade war with China weighed on consumer confidence as evidenced by a six-month low in the University of Michigan consumer sentiment index. The index dropped to 97.1 in July from 98.2 previously, missing expectations to improve to 98.4.
In corporate news, Johnson & Johnson (JNJ) was ordered to pay $4.7 billion by a Missouri jury after the company's talcum powder was linked to ovarian cancer in 22 individuals, while Boeing (BA) said it will take a $124 million ($0.21 per share) after-tax charge as a result of an unfavorable ruling involving the company's sale of its production facilities in Kansas.
Dow Jones Industrial Index was up 94.52 points (+0.38%)
S&P 500 was up 2.62 points (+0.10%)
Nasdaq Composite Index was up 2.06 points (+0.03%)
FTSE 100 was up 0.14%
Nikkei 225 was up1.85%
Hang Seng Index was up 0.16%
Shanghai China Composite Index was down 0.22%
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