U.S. stocks were able to extend gains for the week as technology issues led a mild advance that developed for equities amid easing concerns over President Trump’s announced tariffs, though specific details of the proposed policy remain elusive. Treasury yields finished mixed and the U.S. dollar declined. Crude oil prices inched lower and gold rallied. Target posted mixed quarterly results and network strategy and technology company Ciena announced Q2 revenue guidance that exceeded estimates.

The Dow Jones Industrial Average (DJIA) ticked 9 points higher to 24,884, the S&P 500 Index gained 7 points (0.3%) to 2,728, and the NASDAQ Composite gained 41 points (0.6%) to 7,331. In moderately heavy volume, 835 million shares were traded on the NYSE and 2.1 billion shares changed hands on the NASDAQ. WTI crude oil gained $0.03 to $62.60 per barrel and wholesale gasoline shed $0.01 to $1.93 per gallon. Elsewhere, the Bloomberg gold spot price increased $13.66 to $1,333.78 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.5% lower at 89.61.

Factory orders declined 1.4% month-over-month (m/m) in January, matching the Bloomberg expectation, and versus December’s upwardly revised 1.8% increase. Stripping out the volatile transportation component, orders rose 0.4% and December’s gain was revised higher to 0.9%. January durable goods orders—preliminarily reported last week—were adjusted favorably to a 3.6% drop. Also, nondefense capital goods orders excluding aircraft, a gauge of business spending, were revised negatively to a 0.3% decline from the initially-reported 0.2% decrease.

Treasuries finished mixed, with the yield on the 2-year note ticking 1 basis point (bp) higher to 2.25%, the yield on the 10-year note mostly flat at 2.88% and the 30-year bond rate declining 1 bp to 3.15%.

The U.S. dollar traded lower, with the markets grappling with both the recently flared-up Fed rate hike uncertainty and global trade concerns, which have been sources of the recent rise in volatility, while North Korean skittishness is cooling.

Schwab Center for Financial Research – Market Analysis Group

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