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US: Wall St advances on Washington temporary shutdown deal
[NEW YORK] Wall Street gained ground on Friday in a broad-based rally as investors were heartened by news that Washington would move to temporarily end the longest US government shutdown in history.
All three major US stock indexes advanced, with the Dow and the Nasdaq eking out their fifth straight weekly gains. But the S&P 500 posted its first weekly loss of the year, snapping a four-week run.
The indexes backed off their highs after President Donald Trump confirmed he and lawmakers agreed to advance a three-week stop-gap spending plan to reopen the government.
Investor sentiment had faltered in recent days in the face of revived jitters related to the shutdown and the prolonged US-China tariff spat.
"As some of these uncertainties in the market start to diminish we'll get a clearer picture as to where things are headed," said Charlie Ripley, senior market strategist for Allianz Investment Management in Minneapolis. "And today's news of the ending of the government shutdown certainly alleviates some of that overhang."
"But most likely some uncertainty will linger as this is only a temporary measure to fund the government for now," Mr Ripley added.
Among these uncertainties, the ongoing trade dispute between the United States and China continues to worry investors.
With the World Economic Forum in Davos, Switzerland, nearing its conclusion, business leaders have expressed worries over the tariff battles, saying they are "fed up" with Trump's policies.
An escalation of the US-China trade war would sharpen the global economic slowdown already under way, according to a Reuters poll of hundreds of economists worldwide.
Fourth-quarter corporate earnings season is in high gear, with more than 22 per cent of S&P 500 companies having reported. Of those, 72.3 per cent have beaten analyst expectations.
Earnings on Friday were a mixed bag.
Starbucks Corp also surpassed Wall Street consensus, reporting better-than-anticipated quarterly sales. The coffee chain's shares advanced 3.6 per cent.
Consumer products company Colgate-Palmolive Co reported fourth-quarter revenue that surprised to the upside but said it expects profit to decline in 2019. Its stock edged down 0.6 per cent.
Intel Corp shares dropped 5.5 per cent following the chipmaker's disappointing fourth-quarter sales and current-quarter forecasts.
Still, the Philadelphia SE Semiconductor Index ended the session up 2.2 per cent in the wake of a spate of positive earnings from other chipmakers.
DR Horton Inc's quarterly results fell short of analyst expectations, underscoring persistent weakness in the US housing market. The homebuilder's shares fell 2.6 per cent.
Western Digital Corp also disappointed, but it closed 7.5 per cent higher after providing an upbeat forecast and saying it was committed to paying dividends.
The Dow Jones Industrial Average rose 183.96 points, or 0.75 per cent, to 24,737.2, the S&P 500 gained 22.43 points, or 0.85 per cent, to 2,664.76 and the Nasdaq Composite added 91.40 points, or 1.29 per cent, to 7,164.86.
Advancing issues outnumbered declining ones on the NYSE by a 3.41-to-1 ratio; on Nasdaq, a 2.56-to-1 ratio favored advancers.
The S&P 500 posted 14 new 52-week highs and no new lows; the Nasdaq Composite recorded 36 new highs and 20 new lows.
Volume on US exchanges was 7.55 billion shares, compared to the 7.79 billion average over the last 20 trading days.