Markets closed in green on Friday after Bloomberg reported that a trade deal between the United States and China would be finalized by the mid of March. Meanwhile, dismal U.S. manufacturing data from the Institute of Supply Management (ISM) weighed on the markets. Nevertheless, the three major indices ended the session in the positive territory. For the week, while the S&P 500 and the Nasdaq ended in the green, the Dow ended in the red.
The Dow Jones Industrial Average (DJI) increased 0.4%, to close at 26,026.32. The S&P 500 increased 0.7% to close at 2,803.69. The tech-laden Nasdaq Composite Index closed at 7,595.35, gaining 0.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 6.6% to close at 13.80. Advancers outnumbered decliners on the NYSE by a 1.46-to-1 ratio. On Nasdaq, a 1.67-to-1 ratio favored advancing issues.
How Did the Benchmarks Perform?
The Dow gained 110.3 points to end the session in the positive territory. Gains for the Dow were buoyed by a surge in the shares of Nike NKE and Chevron CVX , which gained 1.9% and 2.1%, respectively.
The S&P 500 added 19.2 points to also end in the green. Of the 11 major sectors of the S&P 500, eight ended in the positive territory, with energy and healthcare leading the advancers. The Energy Select Sector SPDR ETF (XLE) and the Health Care Select Sector SPDR ETF (XLV) gained 1.8% and 1.4%, respectively. The broader index closed above the psychological 2,800 mark on Friday for the first time since Nov 8, 2018.
Meanwhile, the Nasdaq gained 62.8 points to also end in the green. Gains for the tech-laden index were buoyed by a 2% bump in the shares of Amazon AMZN . You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
U.S. and China Close to A Trade Deal
Per a Bloomberg Report published on Feb 28, America and China are in advancing fast toward a trade deal. The report stated that U.S. officials were preparing for a summit between President Donald Trump and China's Xi Jining in which the two leaders are expected to sign a 150-page document. The agreement could be reached as early as in the next two weeks.
Officials from the White House made no comments about such developments between two of the world's largest economies. However, Trump had stated at a press conference in Vietnam that he would "prepared to walk from a deal" if a fair agreement is not made.
Moreover, early last week, U.S. trade representative Robert Lighthizer had stated that additional tariffs on $200 billion worth of Chinese goods, set to be increased from 10% to 25% from 12.01 A.M. Mar 1, would not be imposed. These developments boosted the market sentiments.
On the economic data front, the ISM Manufacturing Index for the month of February came in at 54.2%, below the consensus estimate of 55.8% and the previous month's figure of 56.6%. This marked the index's slowest rate of growth since November 2016 - the election of Donald Trump as the U.S. President.
Meanwhile, per the U.S. Department of Commerce, the PCE price index for the month of December increased 0.1%. Further, excluding food and energy the PCE price index increased 0.2% in the month.
Markit's manufacturing PMI for the month of February came in at 53% in February, declining from 53.7% it hit in January.
For the week, the S&P 500 and the Nasdaq increased 0.4% and 0.9%, respectively. Meanwhile, the Dow declined 0.1% in the week, ending its nine-week streak of gains Friday. It was also its longest period of weekly gains since May 1995.
An abrupt end to the summit meeting between President Donald Trump and his North Korean counterpart Kim Jong Un weighed on the markets. However, Wall Street rally continued in February as well. The three major stock indices - the Dow, S&P 500 and Nasdaq Composite - gained 3.7%, 3% and 3.4%, respectively.
On Feb 27, in his testimony before the House Committee, Fed Chair Jerome Powell said that the central bank will not reduce its $4 trillion balance sheet this year. Moreover, positive developments on the trade war front kept investors' sentiment high throughout the week.
Stocks That Made Headlines
TransCanada Corporation TRP recently announced that it has received the Federal Energy Regulatory Commission's (FERC) approval for full in-service of its Mountaineer XPress ("MXP") natural gas pipeline project. ( Read More )
Zacks' Top 10 Stocks for 2019
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