Major Averages Close Slightly Lower Following Trump Comments – U.S. Commentary

After seeing modest strength for much of the session, stocks pulled back near the unchanged line in afternoon trading on Friday before closing slightly lower. The major averages added to the losses posted in the previous session.

The major averages ended the day just below the unchanged line. The Dow edged down 6.38 points or less than a tenth of a percent to 25,058.12, the Nasdaq slipped 5.10 points or 0.1 percent to 7,820.20 and the S&P 500 dipped 2.66 points or 0.1 percent to 2,801.83.

For the week, the major averages turned in a mixed performance. While Nasdaq edged down by 0.1 percent, the S&P 500 inched up less than a tenth of a percent and the Dow rose by 0.2 percent.

The modestly lower close on Wall Street came after President Donald Trump continued to urge the Federal Reserve to refrain from raising interest rates.

Trump suggested the Fed’s plan to gradually raise rates could hurt recent economic progress, claiming the rate hikes penalize the U.S. for doing well.

“The United States should not be penalized because we are doing so well,” Trump tweeted. “Tightening now hurts all that we have done.”

He added, “The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates – Really?”

In an interview with CNBC, Trump also indicated a willingness to impose tariffs on all Chinese imports to the U.S.

“I’m ready to go to 500,” Trump said, apparently referring to the $505.5 billion of Chinese imports to the U.S. in 2017.

“I’m not doing this for politics, I’m doing this to do the right thing for our country,” Trump said. “We have been ripped off by China for a long time.”

The Trump administration previously imposed tariffs of $34 billion worth of Chinese imports and has threatened to impose tariffs on another $200 billion worth of goods.

Trump argued the strength in the stock market since his election has allowed him to be more aggressive on trade, claiming, “We’re playing with the bank’s money.”

The modest strength seen earlier in the day came amid a positive reaction to earnings news from big-name companies like Microsoft (MSFT), with the software giant climbing 1.8 percent.

The advance by Microsoft came after the company reported better than expected fiscal fourth quarter results and provided upbeat guidance for the current quarter.

Industrial conglomerate Honeywell (HON) also moved notably higher after reporting second quarter results that exceeded analyst estimates and raising its full-year guidance.

On the other hand, shares of General Electric (GE) moved to the downside even though the industrial conglomerate reported second quarter results that beat expectations on both the top and bottom lines.

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Housing, oil service and real estate stocks moved to the downside on the day, while tobacco stocks continued to recover from the early sell-off seen in the previous session.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. China’s Shanghai Composite Index jumped by 2.1 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent. However, Japan’s Nikkei 225 Index bucked the uptrend and fell by 0.3 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index slumped by 1 percent, the French CAC 40 Index dropped by 0.4 percent and the U.K.’s FTSE 100 Index edged down by 0.1 percent.

In the bond market, treasuries pulled back after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.8 basis points to 2.895 percent.

Looking Ahead

Earnings news is likely to continue to attract attention next week, with a slew of big-name companies due to report their quarterly results.

Google parent Alphabet (GOOGL), Verizon (VZ), AT&T (T), Boeing (BA), Coca-Cola (KO), General Motors (GM), UPS (UPS), Facebook (FB), Ford (F), McDonald’s (MCD), Amazon (AMZN), Intel (INTC), and Exxon Mobil (XOM) are among the companies due to report their results next week.

Traders are also likely to keep an eye on the latest economic data, including reports on new and existing home sales, durable goods orders, and the preliminary reading on second quarter GDP.

by RTTNews Staff Writer

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