Markets Finish Volatile Week on the Upswing…..

The U.S. equity markets headed into the holiday weekend with modest gains following a wild week that saw stocks whipsaw between positive and negative territory amid heightened U.S.-China trade tensions and resurfaced global growth concerns. Treasury yields were nearly unchanged and the U.S. dollar dipped amid a light economic calendar that showed that durable goods orders were a tick below estimates, while crude oil prices rose in choppy trading after yesterday’s sharp drop, and gold finished in the green. In equity news, HP Inc. bested revenue forecasts and offered relatively favorable guidance, but Foot Locker fell short of earnings and same-store sales expectations.

The Dow Jones Industrial Average (DJIA) rose 95 points (0.4%) to 25,586, the S&P 500 Index gained 4 points (0.1%) to 2,826, and the NASDAQ Composite added 9 points (0.1%) to 7,637. In light volume, 639 million shares were traded on the NYSE and 1.6 billion shares changed hands on the NASDAQ WTI crude oil increased $0.72 to $58.63 per barrel and wholesale gasoline was up $0.02 at $1.91 per gallon. Elsewhere, the Bloomberg gold spot price advanced $1.30 to $1,284.75 per ounce, and the Dollar Index— a comparison of the U.S. dollar to six major world currencies—was down 0.3% at 97.59. Markets were lower for the week, as the DJIA fell 0.7%, the S&P 500 Index lost 1.1%, and the NASDAQ Composite declined 2.2%.

April preliminary durable goods orders fell 2.1% month-over-month (m/m), compared to the Bloomberg estimate of a 2.0% decline and March’s downwardly-revised 1.7% gain. Ex-transportation, orders were little changed m/m, below forecasts of a 0.1% rise and compared to March’s downwardly-revised 0.5% decline. Orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, decreased 0.9%, compared to projections of a 0.3% decline, and the prior month’s figure was revised lower to a 0.3% rise from the initially reported 1.4% increase.

The generally volatile report showed a drop in demand for transportation equipment, led by a sharp drop in orders for nondefense aircraft and parts, likely impacted by the 737 MAX issues for Dow member Boeing Company (BA $355), which was met with weakness in manufacturing and communications equipment. The softness overshadowed a solid gain in orders for computers and related products, and modest increases for machinery and electrical equipment, appliances and components.

Treasuries were nearly flat, as the yield on the 2-year note increased 2 basis points (bps) to 2.17%, while the yields on the 10-year note and the 30-year bond were unchanged at 2.32% and 2.75%, respectively. The markets have been choppy as of late, led by heightened volatility in the technology sector, amid escalated trade tensions and some mixed global economic data.

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