Sun, Jan 27, 2019 - Page 14 News List

Wall St advances on shutdown deal

‘CLEARER PICTURE’:A deal to reopen the US government for three weeks eased investors concerns, but uncertainty would linger, as it is just a temporary measure

Reuters, NEW YORK

Wall Street gained ground on Friday in a broad-based rally as investors were heartened by news that Washington would move to temporarily end the longest US government shutdown in history.

All three major US stock indices advanced, with the Dow Jones Industrial Average and the NASDAQ Composite eking out their fifth straight weekly gains.

However, the S&P 500 posted its first weekly loss of the year, snapping a four-week run.

The indices backed off their highs after US President Donald Trump confirmed that he and US lawmakers agreed to advance a three-week stop-gap spending plan to reopen the government.

Investor sentiment had faltered in the past few days in the face of revived jitters related to the shutdown and the prolonged US-China tariff spat.

“As some of these uncertainties in the market start to diminish we’ll get a clearer picture as to where things are headed,” said Charlie Ripley, senior market strategist for Allianz Investment Management in Minneapolis. “And today’s news of the ending of the government shutdown certainly alleviates some of that overhang.”

“But most likely some uncertainty will linger, as this is only a temporary measure to fund the government for now,” Ripley added.

Among these uncertainties, the ongoing trade dispute continues to worry investors.

With the World Economic Forum in Davos, Switzerland, nearing its conclusion, business leaders have expressed worries over the tariff battles, saying they are “fed up” with Trump’s policies.

An escalation of the trade dispute would sharpen the global economic slowdown already under way, according to a Reuters poll of hundreds of economists worldwide.

Fourth-quarter corporate earnings season is in high gear, with more than 22 percent of S&P 500 companies having reported. Of those, 72.3 percent have beaten analysts’ expectations.

Earnings on Friday were a mixed bag.

Starbucks Corp also surpassed Wall Street consensus, reporting better-than-anticipated quarterly sales. The coffee chain’s shares advanced 3.6 percent.

Consumer products company Colgate-Palmolive Co reported fourth-quarter revenue that surprised to the upside, but said it expects profit to decline this year. Its stock edged down 0.6 percent.

Intel Corp shares dropped 5.5 percent following the chipmaker’s disappointing fourth-quarter sales and current-quarter forecasts.

Still, the Philadelphia SE Semiconductor Index ended the session up 2.2 percent in the wake of a spate of positive earnings from other chipmakers.

DR Horton Inc’s quarterly results fell short of analysts’ expectations, underscoring persistent weakness in the US housing market. The homebuilder’s shares fell 2.6 percent.

Western Digital Corp also disappointed, but its closed 7.5 percent higher after providing an upbeat forecast and saying it was committed to paying dividends.

The Dow Jones Industrial Average on Friday rose 183.96 points, or 0.75 percent, to 24,737.2, the S&P 500 gained 22.43 points, or 0.85 percent, to 2,664.76 and the NASDAQ Composite added 91.40 points, or 1.29 percent, to 7,164.86.

For the week, the Dow added 0.1 percent, the S&P slipped 0.2 percent and the NASDAQ inched up 0.1 percent.

Advancing issues on Friday outnumbered declining ones on the New York Stock Exchange by a 3.41-to-1 ratio; on NASDAQ, a 2.56-to-1 ratio favored advancers.

The S&P 500 posted 14 new 52-week highs and no new lows; the NASDAQ Composite recorded 36 new highs and 20 new lows.

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