The main Wall Street indexes ended the week with a rise after another round of trade talks between the US and China. Investors are more and more hopeful that a deal will be reached.
The blue-chip index Dow Jones Industrial Average added 181.18 points to its value and reached 26,031.81 points, with Intel being the best performer. The index, including 30 companies, conquered the threshold of 26,000 points for the first time since early November, marking its ninth consecutive weekly growth, which is its longest winning series since May 1995.
The broader index S&P 500 advanced by 0.64% to 2,792.67 points due to the good performance of the technology sector. The technology index Nasdaq Composite rose by 0.91% to 7,527.54 points, with Facebook, Amazon, Netflix, and Alphabet reporting increases. Nasdaq also recorded its ninth consecutive weekly growth, which is his longest winning series since May 2009.
The American markets started the year with a flying start. The major indexes rose by at least 11% year to date after the Federal Reserve made it clear that it would be patient to raise interest rates. Moreover, the hopes that the US and China will put an end to their trade dispute also supported the markets. The growth comes after the sharp fall in US indexes at the end of 2018.
US President Donald Trump met with Chinese Deputy Prime Minister Liu He, who gave a letter expressing the hopes of Chinese President Xi Jinping that the two countries could redouble their efforts to reach a trade agreement. The main indexes retreated from their highest level during the Friday session following these comments.
The optimism of investors that the two countries will reach a deal to end their protracted trade war is growing, but some experts say the hardest part is yet to come. The negotiations are getting into the hardest part, such as intellectual property.
The trade tensions between the US and Europe are also growing. The European Union is preparing to impose duties on heavy machinery produced by American companies such as Caterpillar if the US impose tariffs on EU-produced cars.
The Trump administration is threatening to impose customs duties of up to 25% on imports of European cars and automotive parts.
On the bond markets, the yields on 10-year and 30-year US government bonds declined to 2.648% and 3.007%, respectively.
Corporate stocks performance
The stocks of Caterpillar’s stock declined before the commencement of trading, but during the session, their price slightly rose. At the end they ended with decrease of 0.16%.
Intel shares rose by 2% on Friday after Morgan Stanley raised their rating.
Meanwhile, Kraft Heinz’s shares fell by 27.46% after the consumer goods company opened an investigation into the Securities and Exchange Commission on its accounting practices. Thus, the company wiped out 15 billion USD of its market capitalization.
Meanwhile, the technology stocks were on the rise. FAANG shares rose between 0.75% and 1.6% with Netflix reporting strongest increase.
Car makers stocks started the session deep into red, but later revived and recovered all the loses with Ford stalled and General Motors finished with increase of 0.9%.
Meanwhile, Boeing, IBM, United Technologies, Goldman Sachs and Home Depot have rallied double digits to start the year, contributing around 50 percent of the year’s gains to the price-weighted index.