The main Wall Street indexes reported strong weekly growth thanks to technology companies amid resurgent investor optimism on the resolution of the trade dispute between the US and China.
The blue-chip index Dow Jones Industrial Average added 138.93 points to its value and reached 25,848.87 points, with Boeing’s stock rising by 1.5%. This happened after the company announced it plans to upgrade the 737 Max Airplane Flight Management Software. The company’s shares were pressured during the week after a 737 Max flight of Ethiopia Airlines crashed on Sunday, and this led to suspending flights of the aircraft model worldwide.
Growth in the technology sector and consumer commodities pushed the S&P 500 up by 0.5% to a level of 2,822.48 points. The technological index Nasdaq Composite advanced by 0.76% to a level of 7,688.53 points.
For the week, the S&P 500 and Nasdaq Composite achieved growth of at least 2.9%, while the Dow rose by only 1.7% on the background of Boeing’s problems. The S&P 500 also scored its biggest leap for a week since November 2018.
Since the beginning of the year, the three major indexes have risen by over 10%.
At a macroeconomic level, Chinese Deputy Prime Minister Liu He spoke on the phone with the US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer. The trade negotiations between the US and China are likely to lead to an interim agreement, turning future negotiations into a framework to monitor China’s compliance with trade and intellectual property policies.
In the bond markets, the yields on 10-year and 30-year US Treasuries fell to 2.591% and 3.013%, respectively.
Corporate stocks performance
This week the growth was driven by technology companies with the sector rising by 4.9%. The technology sector is performing best since the beginning of 2019. Nvidia was the best-performing company in the industry with a growth of over 12%, while semiconductor companies such as Broadcom and Lam Research also achieved strong growth.
The semiconductor companies rose on Friday and VanEck Vectors Semiconductor ETF (SMH) rose 2.7%. Broadcom’s shares led the growth, rising by more than 8% after the company posted better-than-expected quarterly data.
The stocks of AT&T rose by 1.3% after Raymond James raised the rating of the telecom giant to “outperform” from “market perform”, citing attractive appeal against its rival Verizon.
Ulta Beauty’s share price rose by 8.3% after better-than-expected results for the quarter. At the same time, Tesla’s shares fell by 5% after investors were disappointed with the introduction of Model Y, the company’s last electric vehicle.
Facebook stock dropped almost 4% after two executives left the company late Thursday, according to a company announcement. Facebook is trying to recover from a near-44% drop from its highs in late December but remains over 22% off those highs. Facebook stock is looking for support near its 200-day line.
Elsewhere among the FANG stock, Amazon.com gained 1%, as the right side of a deep base continues to form. Amazon stock is still below its 200-day line, a potential resistance level.
The worst performers in Dow Jones during the session were Coca-Cola Company (-0.88%), UnitedHealth Group Incorporated (-0.74%) and Caterpillar (-0.76%).
Corporate earnings reports
Broadcom shares are traded at an all-time high Friday after the Apple Inc and Samsung chip provider posted stronger than expected first-quarter earnings, reiterated its 2019 revenue forecast and said it would return 12 billion USD to investors in dividends and buybacks this year. Broadcom said earnings for the three months ending on February 3, the company’s fiscal first quarter, came in at 5.55 USD per share, up 8.4% from the same period last year and well ahead of the Street forecast of 5.22 USD per share. Group net revenues, Broadcom said, were pegged at 5.789 billion USD, up 8.7% from the previous year period but just shy of the consensus forecast of 5.82 billion USD.