Sun, Jun 10, 2018 - Page 14 News List

US indices end modestly higher following early stumble


The US stock market shook off a bumpy start and ended modestly higher on Friday, led by gains in consumer products companies.

Trading was muted ahead of the G7 summit in Quebec, which began on Friday. The meeting was expected to be tense as other leaders were to confront US President Donald Trump over his protectionist trade policies.

Overall, major indices were mostly higher after posting small losses on Thursday.

The G7 meeting was set to be unusually contentious, as the leaders of France and Canada in particular have expressed in tough terms their disapproval of the tariffs Trump has imposed on steel and aluminum imports.

Trump was expected to leave the summit yesterday before it officially concludes as he heads to Singapore ahead of his meeting with North Korean leader Kim Jong-un.

Trade tensions have been rattling markets for the past three months, and the G7 summit was not expected to deliver much relief.

However, there could be a silver lining to the ongoing talks between the US and its trading partners over the highly unpopular US tariffs, Wells Fargo Investment Institute senior global equity strategist Scott Wren said.

“The end result probably is going to be lower tariffs across the board,” Wren said.

Ultimately, a large number of older tariffs that are levied on US imports and exports could be reduced or eliminated, he said.

The S&P 500 on Friday added 8.66 points, or 0.3 percent, to 2,779.03, rising 1.6 percent from 2,734.62 on June 1.

The Dow Jones Industrial Average on Friday rose 75.12 points, or 0.3 percent, to 25,316.53, jumping 2.8 percent from a close of 24,635.21 a week earlier.

The NASDAQ on Friday gained 10.44 points, or 0.1 percent, to 7,645.51, gaining 1.2 percent from 7,554.33 on Friday last week.

The Russell 2000 index of smaller-company stocks on Friday rose 4.72 points, or 0.3 percent, to 1,672.49, an increase of 1.5 percent from a close of 1,647.98 a week earlier.

Smaller and more US-focused stocks have fared better than the rest of the market over the past few months as investors worry that trade frictions could impact large multinational companies.

The Russell is on a six-week winning streak.

Wall Street appeared to get ever so slightly less worried about the trade situation this week.

The Dow has taken a bigger hit from the trade disputes than other US indices, but this week was its best in three months.

The NASDAQ and Russell 2000 reached all-time highs on Wednesday.

Wall Street will be focused on central banks even more than usual next week, as the European Central Bank and the US Federal Reserve hold major meetings.

The European Central Bank will probably start to pare back its economic stimulus, even though the European economy slowed in the first quarter of this year, Wren said.

Investors are nearly certain the Fed will raise interest rates for the second time this year, out of three the Fed has said it is planning.

If the Fed hints it is considering a fourth increase later in the year, it might jolt the stock market.

“Any more than three hikes this year is a headwind for equities,” Wren said.

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