Markets

Close Update: Wall Street Shrugs off Escalating Trade Tensions as China Halts Yuan Decline, Earnings Impress

The Dow Jones Industrial Average and S&P 500 traded higher on Friday as strong corporate results coupled with Beijing's efforts to curb the runaway depreciation in the Chinese yuan overshadowed persistent trade war jitters and an underwhelming labor market report. The Dow gained more than 100 points on strength in IBM ( IBM ) and Pfizer ( PFE ) as advancers led decliners by five to one.

Stock futures were gaining ground ahead of the open when the People's Bank of China adjusted the reserve requirement for forex settlements to 20%, a measure aimed at stabilizing the yuan after Beijing announced retaliatory trade tariffs on US products and Commerce Secretary Wilbur Ross warned that the president will turn up the pressure on China to "modify their behavior".

But early gains were compromised on a below-consensus 157,000 gain in non-farm payrolls and wider trade deficit that underscored the impact from US/China trade restrictions. After struggling for traction, downside pressure was mitigated by strong upward revisions to June non-farm payrolls and a 0.3% gain in average hourly earnings that matched expectations.

Friday's other economic data included a decline in the non-manufacturing services sector index from the Institute for Supply Management (ISM) to 55.7 from 59.1, previously, and a slight pull-back in the comparable PMI to 56.0 from 56.2 in June.

After digesting the morning's data, stocks were propped up by upbeat quarterly results from GoPro ( GPRO ), Kraft Heinz ( KHC ) and Dish ( DISH ). Consequently, of the almost 400 names of the S&P 500 that have reported Q2 results, roughly 85% have beaten Wall Street's expectations.

US MARKETS

Dow Jones Industrial Index up 136.42 points (+0.54%)

S&P 500 up 13.13 points (+0.46%)

Nasdaq Composite Index up 9.33 points (+0.12%)

GLOBAL SENTIMENT

FTSE 100 was up 1.10%

Nikkei 225 was up 0.06%

Hang Seng Index was down 0.14%

Shanghai China Composite Index was down 0.97%

UPSIDE MOVERS

(+) PXLW (+28.99%) Reported better-than-expected Q2 sales

(+) MED (+21.82%) Q2 results beat expectations

(+) GPRO (+17.70%) Tops Q2 estimates

(+) KHC (+8.55%) Q2 results exceed expectations

DOWNSIDE MOVERS

(-) TWI (-29.64%) Missed Q2 EPS estimates, guides FY sales below street view

(-) VREX (-26.32%) Q3 results missed expectations

(-) TSRO (-23.55%) Q2 misses expectations

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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