Stocks rose Friday, with the Dow on track for its longest weekly winning streak in over two decades, thanks to optimism over U.S.-China trade talks, with President Donald Trump set to meet China’s top trade negotiator in the White House.
What are stock indexes doing?
The Dow Jones Industrial Average DJIA, +0.56% rose 149 points, or 0.5%, to 25,998 after earlier trading above 26,000 for the first time since November. The S&P 500 index SPX, +0.52% added 14 points, or 0.5%, to 2,788 and the Nasdaq Composite COMP, +0.72% advanced 53 points, or 0.6%, to 7,513, on pace for its ninth day of gains.
The Dow is up 0.5% for the week, putting it on path to extend its gains to a ninth week, which would mark the longest such run since May 1995, according to the Dow Jones Data Group. The S&P 500 climbed 0.5% and the Nasdaq rose 0.6% week to date.
What’s driving the market?
U.S.-China trade negotiations remain in focus for investors. The two sides reportedly met for more than nine hours Thursday and reports said Trump will meet with China’s top trade negotiator, Vice Premier Liu He, on Friday.
Still, deep divisions remain over fundamental issues, with U.S. officials pressing China to halt what Washington calls illicit technology transfers and improper subsidies for state-owned firms, The Wall Street Journal reported.
The talks are aimed at avoiding an increase in tariffs on Chinese imports set to occur on March 2, at 12:01 a.m. On Tuesday, President Trump told reporters that the March 2 deadline isn’t a “magical date,” giving investors hope that the deadline will be extended, at least until a meeting can be arranged between Trump and Chinese President Xi Jinping, some time in the coming weeks.
New York Fed President John Williams, a voting member of the central bank’s interest-rate committee, gave a talk on the relationship between the unemployment rate and inflation, which economists have worried has broken down in recent years. Williams argued that the relationship is “alive and kicking,” which means that the Fed needs to be “vigilant” towards the prospect of inflation.
Richard Clarida, the vice chairman of the Fed, hinted at a possible change in the Fed’s inflation strategy by discussing the contrasting between the current strategy which treats persistent shortfalls of inflation from the 2% target as “bygones,” to “makeup” strategies, where the central bank could target average inflation over several years.
What are analysts saying?
“The market is in a precarious position, bumping up against highs not seen since last fall. This could be a textbook wall of worry where the market climbs despite the negative forces its facing,” Mary Ryan, senior equity options strategist at E-Trade Financial Corp., said in a note.
“Trade is the likely catalyst to tip the scales in either direction, and there are three scenarios: If negotiations crumble, we could get a pullback, if they strike a deal we could see a breakout, and anything in between could be a jolt in either direction,” she said. “All these outcomes carry at least some risk of a pullback, so an uptick in volatility could be in the cards.”
What stocks are in focus?
Shares of Kraft Heinz Co. KHC, -28.22% tumbled 27% after the food company reported weaker-than-expected fourth-quarter results, slashed its dividend and revealed an accounting investigation that resulted in a subpoena from the Securities and Exchange Commission.
Wayfair Inc. W, +28.13% rallied 28% after the online home furnishings retailer reported fourth-quarter losses that were smaller than expected, while beating analysts revenue forecasts.
Shares of Dropbox Inc. DBX, -7.95% were down 8% after the company reported earnings late Thursday. While Dropbox beat estimates for fourth-quarter revenue and profits, it offered guidance on margins for 2019 that disappointed.
Stamps.com Inc. STMP, -57.18% shares cratered 57% after the company announced the end of its exclusive partnership with the U.S. Postal Service. Management said that ending the deal was part of an effort to work with other shipping providers, but would lead to a sharp drop in earnings in 2019.
Shares of AutoNation Inc. AN, -3.28% fell 4.4% after the auto retailer announced a greater decline in fourth quarter earnings and revenue than expected.
Roku Inc. ROKU, +24.09% shares jumped 21% after the company announced better-than-expected fourth quarter earnings and revenue.
How are other markets trading?
In Asia, stocks closed mostly higher, with the Shanghai Composite Index SHCOMP, +1.91% and Hong Kong’s Hang Seng Index HSI, +0.65% both gaining ground. Japan’s Nikkei 225 NIK, -0.18% however, shed 0.2%. European stocks gained with the Stoxx Europe 600 SXXP, +0.22% up 0.2%
In commodities markets, oil CLJ9, +0.42% prices were firmer, while the value of gold GCJ9, +0.20% rose and the U.S. dollar DXY, -0.08% edged lower.
—William Watts contributed to this report
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