U.S. stocks closed Friday’s trading session mostly lower and finished the week slightly to the downside with global trade uncertainty lingering and skittishness toward tightening financial conditions remaining. Treasury yields were lower and crude oil prices were also down, while gold ticked higher and the U.S. dollar continued its recent rise. Deere, Nordstrom and Applied Materials released quarterly results and Campbell Soup also announced earnings and that its CEO has chosen to retire. The domestic economic calendar was void of any major releases.

The Dow Jones Industrial Average (DJIA) increased 1 point to 24,715, the S&P 500 Index shed 7 points (0.3%) to 2,713, and the NASDAQ Composite declined 28 points (0.4%) to 7,354. In moderate volume, 872 million shares were traded on the NYSE and 1.9 billion shares changed hands on the NASDAQ. WTI crude oil traded $0.21 lower $71.28 per barrel and wholesale gasoline was down $0.01 at $2.23 per gallon. Elsewhere, the Bloomberg gold spot price added $1.09 to $1,291.88 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% higher at 93.66. Markets were mildly lower for the week, as the DJIA and the S&P 500 Index both dipped 0.5% and the NASDAQ Composite declined 0.7%.

Treasuries finished higher as the economic calendar was void of any major releases on Friday, with the yield on the 2-year note declining 2 basis points (bps) to 2.54% and the yields on the 10-year note and the 30-year bond dropping 5 bps to 3.06% and 3.20%, respectively.

The yield on the 10-year Treasury note held above 3.00% and at levels not seen since 2011, the U.S. dollar continued to grind higher to highs not seen since December, and crude oil prices slipped slightly after rallying to multi-year highs.

Stocks modestly declined for the week, with weakness in financials and technology sectors overshadowing rallies for energy and materials issues. Fed rate hike expectations nudged higher amid favorable economic reports and increased inflation expectations despite a recent soft patch of consumer and wholesale inflation data. Retail sales rose, regional manufacturing activity unexpectedly accelerated, homebuilder sentiment improved for the first time this year, and Leading Indicators continued to move higher. However, geopolitical concerns flared up with North Korea threatening to pull out of the highly-anticipated summit with the U.S., while trade uncertainty lingered as China and the U.S. conducted another round of talks void of any breakthrough agreements. Earnings season hit the home stretch and the retail sector was in focus but Dow members Home Depot (HD $188) and WalMart (WMT $84) posted mixed results, though Macy’s (M $34) blew away forecasts and raised its guidance.

Schwab Center for Financial Research – Market Analysis Group

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