U.S. stocks rose at the start of trading on Friday, but Wall Street was still on track for weekly losses as the US Treasury yields were recovered from several years of low targets and investors continue to track US-China trade negotiations.
How are the main reference plans going?
Dow Jones industrial average
DJIA, + 0.87%
rose 200 points, or 0.8%, to 25,776, while the S&P 500 index
SPX, + 1.12%
added 22 points, or 0.8%, on 2,871. The Nasdaq Composite Index
COMP, + 1.33%
gained 77 points, or 1%, to 7,842.
Stocks set up between gains and losses to close substantially higher on Thursday, recovering one part of Wednesday's sale. The Dow Thursday rose 99.97 points, or 0.4%, to end at 25,579.39, while the S&P 500 rose 7 points, or 0.3%, to 2,847.60. The Nasdaq Composite pulled the trend, ending at 7,766.62, a decrease of 7.32 points, or 0.1%.
During Thursday, the S&P 500 had a 2.4% loss for the week, while the Dow was 2.7% and the Nasdaq was down 2.7%.
What is driving the market?
Wall Street staged a relief rally early Friday, following a volatile week of trade dominated by worries about rising US-China trade tensions, weakening global economic growth and falling bond yields.
"Market participants downloaded more risky assets such as a hot potato and rushed to perceive safe havens as bonds and gold as trade tensions and global growth fear promoted risk aversion" earlier this week, FXTM senior research analyst at FXTM said in a note . "Although Treasury yields are climbing away from record lows on Friday when some calm returns to markets, bond market movements are poised to remain on investor radar for the next week."
A brief inversion Wednesday of the main targets for the yield curve, with 10-year returns submerged during the 2-year period, was blamed for contributing to a stock market rout. A general decline in returns, partly linked to a global flight in safety amid financial concerns, also caused the downpour, analysts said. On Friday, 10-year return
TMUBMUSD10Y, + 2.36%
was up 2.6 basis points at 1.558%. Dividends and debt prices are moving in opposite directions.
Some analysts also lent support to stocks to hope for more stimulus from central banks. China's state planner said it would introduce a plan to support disposable income this year and by 2020 in an effort to boost consumption, Reuters reported. The rating agency Fitch noted that more than a third of central banks have loosened monetary policy in the last six months.
President Donald Trump said Thursday that he expected the US-China trade conflict to be short and that the September talks were still scheduled despite growing tensions. China said on Thursday it was preparing to take unspecified steps in response to Trump's decision earlier this month to impose additional duties on Chinese goods imports from September 1.
On the economic front, US home starts fell 4% to an annual rate of 1.19 million, the Department of Commerce said Friday. However, building permits increased 8.4% to an annual rate of 1.34 million, exceeding the consensus estimate of 1.29 million starts, according to a market survey of economists.
"While the headline shows constant weakness, when you dig into it, we have received a mixed reading," Mike Loewengart, vice president of investment strategy at E-Trade, wrote in an email. "The doll in the detached house, which really is the biggest component of the housing market, gives us a reason to be optimistic. "
A reading of consumer sentiment in August is expected at 10
Which shares are in focus?
Shares of farm equipment manufacturer Deere & Co.
DE, + 4.63%
was up 1.2% Friday after it exceeded revenue expectations but fell short of revenue.
Nvidia Corp .
NVDA, + 6.96%
posted revenue in the second quarter following the close Thursday that beat Wall Street expectations for the second quarter. The company exceeded estimates for both earnings and sales for the quarter after several quarters with poor performance for the company and the chip manufacturing industry more broadly, which led to Nvidia's shares falling 22% between April and Friday. Shares rose 6.4% early Friday.
Fellow Semiconductor Company Applied Materials Inc .
also reported better-than-expected third-quarter earnings and revenues late Thursday, though it provided slightly weaker earnings guidance than expected for the fourth quarter. The shares fell by 2%.
How do other markets trade?
Stocks closed higher in Asia on Friday, with China's CSI 300
000300, + 0.45%
and added 0.5%, Japan's Nikkei 225
NIK, + 0.06%
increasing 0.1% and Hong Kong's Hang Seng Index
HSI, + 0.94%
la to 0.9%.
In Europe, the shares increased, and the pan-European Stoxx Europe 600 added 0.9%.
In commodity markets, the price of crude oil
was up 0.1% to about $ 54.50 a barrel, while the price of gold
slipped 0.5% to about $ 1524 per ounce. The US Dollar Index
DXY, + 0.19%
meanwhile, added 0.2%.