Markets closed higher on Friday, the last trading session of the first half of the year, as energy stocks rallied. However, trade war fears saw all three major indexes ending lower for the week. Friday also marked the end of the month, the second quarter and the first half of the year. Markets saw mixed performance during this period.
The Dow Jones Industrial Average (DJI) increased 0.2%, to close at 24,271.41. The S&P 500 rose 0.8% to close at 2,718.37. The Nasdaq Composite Index closed at 7,510.30, increasing 0.9%. A total of 7.16 billion shares were traded on Friday, lower than the last 20-session average of 7.28 billion shares. Advancers outnumbered decliners on the NYSE by a 1.51-to-1 ratio. On Nasdaq, a 1.19-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The Dow gained 55.36 points, with shares of Nike, Inc. (NKE - Free Report) soaring as much as 11.1% to touch an all-time high. The company reported a return to growth in North America. Nike has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 added 2.06 points, lead by a rally in energy stocks. The blue-chip index rose as much as 200 points at one point but shed most of the gains in the afternoon. The Energy Select Sector SPDR (XLE) gained 0.7%, on concerns of oversupply, while the Materials Select Sector SPDR (XLB) increased 0.4%. The tech heavy Nasdaq gained 6.62 points.
For the week, the Nasdaq lost 2.37%, while the Dow and S&P 500 lost 1.26% and 1.33% respectively. The Dow declined for the third consecutive week, the first time in more than two years.
Energy Stocks Gain, Late Selloff Hit Bank Stocks
Energy and materials stocks helped markets on Friday, which saw the Dow increase as much as 293.47 points at one point. However, a huge selloff in banks stocks erased early gains. Bank stocks performed well almost throughout the day after the Fed announced the second round of the stress test results. This saw most major U.S. lenders announcing high dividend payouts and share buybacks, which saw bank shares rallying.
However, a late session selloff saw markets shedding the initial gains. Shares of Bank of America Corporation (BAC - Free Report) , JPMorgan Chase & Co. (JPM - Free Report) , Morgan Stanley (MS - Free Report) and The Goldman Sachs Group, Inc. (GS - Free Report) lost 1.7%, 0.7%, 1.8% and 1.3%, respectively.
Most of the month saw volatility in markets with stocks returning mixed performances. Trade war fears, which have gripped markets for quite some time, took its toll on stocks throughout the month. President Donald Trump once again threatened to impose tariffs of $200 billion worth of goods imported from China, which led top huge selloffs.
June was also an eventful month that saw the historic meeting between Trump and North Korea’s premier Kim Jong-un. However, markets had high expectations from the meeting but not much impact was seen with stocks tumbling the day after the meeting.
Moreover, as anticipated the Fed increased interest rates by 0.25% and hinted at two more hikes by the end of this year. Also, the Fed announced the annual stress test results for banks and gave OK to 32 of the 35 biggest banks in the United States to raise their dividends and buy back shares. The Nasdaq and S&P 500 gained 0.9% and 0.5% for the month, while the Dow lost 0.6%.
Quarterly Round Up
The second quarter was marked by tremendous volatility in markets. Trade war fears, which had started taking its toll on stocks in the end of first quarter, escalated in the second quarter. While Trump continued to create pressure on China to decrease the trade deficit by imposing tariffs on a wide range of Chinese imports, China too imposed retaliatory tariffs.
This dented investors’ confidence leading to huge sell offs. Tech stocks, which have been driving markets for quite some time, too weren’t spared with all major tech gains suffering. However, a series of meetings between U.S. and China to reach a possible agreement saw trade war fears easing for some time, resulting in a rally in stocks.
However, the quarter again ended with geopolitical tensions escalating as Trump continued with his tariff threats. Despite trade related concerns, the S&P 500, Nasdaq and Dow gained 2.9%, 6.3% and 0.7%, respectively, for the quarter.
Half-Yearly Round Up
After an outstanding 2017, markets touched record highs in January. However, the joyride came to a halt in February, when Trump for the first time announced his plans of imposing additional tariffs on steel and aluminum imported from China. Things soon took the shape of a trade war, as China too threatened to retaliate.
The EU, Canada and Mexico too opposed Trump’s plans of imposing tariffs on steel and aluminum. After the United Stated finally imposed tariffs on $60 billion worth of Chinese goods, China retaliated with tariffs worth $50 billion worth of U.S. goods. This raised fears of a trade war making investors jittery and leading to huge selloffs.
Moreover, tech stocks, which have been on a rally since 2017 also took a hit after Facebook (FB - Free Report) got embroiled in a data-misuse scandal that affected more than 80 billion users. This saw not all tech stocks plummeting on fears of regulatory clampdown.
That said, the U.S. economy showed signs of bullishness. The unemployment rate hit a 18-year low. The Fed, as expected, raised interest rates twice and hinted at another two hikes by the end of this year. The last week of the first half of the year also saw U.S. inflation rate hitting a six-year high. The Fed preferred price gauge, PCE, rose 2.3% from the year ago, the most in six years.
Stocks That Made Headlines
BHP Board Approves South Flank Project to Replace Yandi
Laboratory Corporation of Americas Holdings (LH - Free Report) , popularly known as LabCorp, recently collaborated with Royal Philips (PHG - Free Report) . (Read More)
Hess to Divest Interest in Utica Shale Play for $400M
Hess Corporation (HES - Free Report) has inked an agreement with Ascent Resources – Utica, LLC to divest joint venture interests in the Utica shale play in eastern Ohio. (Read More)
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%. And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>