Stocks open lower, but still head for a winning week on better-than-expected earnings

Stocks opened lower on Friday as investors were set to wrap up the first week of the earnings season.

The Dow Jones Industrial Average traded 46 points lower, or 0.2%. The S&P 500 sand Nasdaq Composite slid 0.1% each.

More than 70 S&P 500 companies have reported calendar third-quarter earnings this week. Of those companies, 81% have posted better-than-expected results, FactSet data shows.


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Weak data from China weighed down the market on Friday.

Some of the companies posting stronger-than-forecast results this week include Bank of America, Netflix, J.P. Morgan Chase and Morgan Stanley. Coca-Cola continued that trend on Friday, rising more than 1%. Their results helped push the major indexes higher for the week.

The Dow was up 0.8% for the week through Thursday’s close. The S&P 500 and Nasdaq Composite were up 0.9% and 1.2%, respectively, for the week. The major indexes are also within striking distance of their record highs.

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) at the opening bell on August 19, 2019 in New York City.

Drew Angerer | Getty Images

Optimism around Brexit also gave stocks a boost this week. The U.K. and European Union struck a long-awaited draft Brexit deal. British and EU officials reached the agreement after successive days of late-night talks and almost three years of tense discussions.

British Prime Minister Boris Johnson will now attempt to persuade U.K. lawmakers to back his agreement, ahead of what is expected to be a knife-edge vote on Saturday.

Still, concerns over the state of the global economy lingered. Overnight, China posted its weakest growth in nearly three decades, as the U.S.-China trade war hit demand at home and abroad. The world’s second-largest economy grew 6% in the third quarter, less than expected, and its weakest pace of expansion in over 27 years.

Sentiment around U.S.-China trade talks improved slightly this week, however. Larry Kudlow, director of the National Economic Council, told CNBC’s “Squawk Box” on Thursday there is “a lot of momentum” to get a deal done.

“There seems to be an underlying eagerness to see the SPX sustainably break above 3K and hit fresh highs,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “But in reality this feels like an attempt by people to wrap a fundamental justification around a bullish bias that is really being motivated by positioning pain, performance anxiety, and general ‘FOMO.’”

“In the very near-term, a 3K upside break might happen, but this will probably wind up being nothing more than a brief ‘head fake’ rally,” Crisafulli wrote.

Source: cnbc.com | Original Link

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