US stocks open higher heading into holiday weekend
U.S. stocks got a lift early Friday following what has been a volatile week.
The Dow Jones Industrial Average, the S&P 500 and Nasdaq Composite all opened higher after two days of falls ahead of the Memorial Day weekend. U.S. financial markets are closed on Monday.
But China trade worries and concerns about global growth have the major stock averages all lower for the week and unless there is a more significant rally Friday the Dow will end the week down five weeks in a row. That would be the longest losing streak in almost nine years. The S&P 500 and Nasdaq may end down for a third straight week, which hasn’t happened since December 21.
|I:DJI||DOW JONES AVERAGES||25662.21||+171.74||+0.67%|
|I:COMP||NASDAQ COMPOSITE INDEX||7628.28379||-122.56||-1.58%|
Fears over a prolonged trade war have calmed a little since President Trump said he plans to meet with China’s Xi Jinping at a summit next month in Japan and also after he suggested overnight that Chinese technology company Huawei may be included in any final trade deal. Earlier this week the White House announced plans to ban the company’s technology in the U.S.
In the U.K., as expected, British Prime Minister Theresa May said she plans to resign as of June 7. Investors appear to hope May’s pending resignation could unblock the political stalemate over Brexit. While some analysts are warning it could simply mean another delay to the EU departure.
In economic news, orders to U.S. factories for large manufactured goods fell sharply last month, pulled down by lower demand for commercial aircraft and cars. The Commerce Department said Friday that orders for durable goods — or items meant to last at least three years — fell 2.1 percent after rising 1.7 percent in March. Orders also fell steeply in February. Aircraft orders, typically a volatile category, plummeted 25.1 percent, after a more modest gain of 7.8 percent in the previous month. Orders for cars and auto parts fell 3.4 percent, the biggest drop in nearly a year. And a category that tracks business investment declined 0.9 percent, the most since December.
The data suggest companies are spending less on big-ticket items, likely in part because of the uncertainties raised by the U.S.-China trade war.
In corporate news, shares of Footlocker dropped after reporting same-store sales growth of 4.6 percent, missing analyst expectations. Tesla‘ stock continued its rebound from Thursday after CEO Elon Musk, in a memo to employees that leaked, suggested deliveries in the current quarter could exceed estimates. And Amazon is getting a bullish shout out from Piper Jaffray. The firm says shares could hit $3,000 over the next two-three years, a 65-percent jump from current levels.
Energy and technoloy stocks are the worst-performing sectors for the week coming into Friday after crude oil prices fell 6 percent this week on concern the trade war will slow demand.
Recent declines in U.S. stocks have sent more money into the bond market. The yield on the 10-year Treasury dropped to 2.31 percent, the lowest level in more than a year. In turn, U.S. mortage rates are falling. A 30-year fixed rate mortgage is now hovering around 4.09 percent, as tracked by Freddie Mac.
Overnight European stocks rebounded, while markets in Asia were mixed.
Japan’s benchmark Nikkei 225 fell 0.2 percent to finish at 21,117.22. Australia’s S&P/ASX 200 lost 0.6 percent at 6,456.00. South Korea’s Kospi dropped 0.7 percent to 2,045.31.
The Associated Press contributed to this report.