Technology companies helped U.S. stocks bounce back from an early slide Friday, though the market was still on track to close out a turbulent week of trading with its third straight weekly loss.
The market has swung between gains and losses all week as investors face the prospect that the trade war between the U.S. and China will drag on. Trading has been volatile since the dispute escalated earlier this month, with both sides raising tariffs on each other’s goods.
President Donald Trump said Thursday that he expects to meet with his Chinese counterpart Xi Jinping at a summit next month in Japan. Both sides have expressed a willingness to resume negotiations, while at the same time ratcheting up antagonistic rhetoric, leaving investors confused about what happens next.
Technology stocks rallied on Friday after leading losses on Thursday. Tech companies have borne the brunt of the now monthlong downturn as they face the possibility of restricted sales to Chinese companies. HP rose 4.8% and Intuit climbed 5.9% after reporting solid profits and issuing a surprisingly good forecast.
Health care stocks and financial companies also notched solid gains. Medtronic rose 1.8%, Prudential Financial gained 1.6% and Capital One Financial added 1.2%.
Utilities stocks eked out small gains as traders shifted their money into riskier holdings. That marked a reversal from a day earlier, when investors fled to utilities, bonds and other safe-play holdings. The yield on the 10 year Treasury rose to 2.32% after slipping to 2.29% late Thursday, its lowest level in more than a year.
Consumer staples, which include beverage and packaged food makers, lagged the market. Constellation Brands slid 4%.
KEEPING SCORE: The S&P 500 index was up 0.3% as of 1:14 p.m. Eastern Time. The Dow Jones Industrial Average rose 100 points, or 0.4%, to 25,590. The Nasdaq composite gained 0.4%.
Major stock indexes in Europe were broadly higher.
The market’s rebound came ahead of a three-day holiday weekend. U.S. stock markets will be closed Monday in observance of Memorial Day.
ANALYSTS’ TAKE: Investors will likely be stuck dealing with a volatile market until there are more solid developments on the U.S.-China trade dispute.
“The lesson learned lately is that nobody knows,” said Craig Birk, chief investment officer at Personal Capital.
He said people are starting to balance their expectations as they realize that the trade dispute could last much longer than initially anticipated.
Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, said the market still expects a deal and the negotiations will have an effect on global growth. But, the trade dispute is only one piece of the bigger picture, as the U.S. economy grows at a solid rate and the global growth picture has improved.
SORE FEET: Foot Locker tumbled 16.8%, erasing all of its gains for the year. The shoe store reported disappointing first quarter financial results and trimmed its profit forecast.
The company’s profit and revenue both fell short of forecasts, along with a key sales measure used by retailers. The company now expects full-year earnings per share to be up by high-single digits, a more reserved outlook than the double-digit increase it had forecast earlier.
Foot Locker, retailers and shoe companies all face higher costs if the U.S. goes ahead with additional tariffs on Chinese goods that would impact footwear. The company and others have sent a letter to President Donald Trump urging him not to put these additional tariffs into effect.
SPORTING GAINS: Hibbett Sports surged 21.9% after the sporting goods retailer blew past Wall Street’s profit expectations and raised its forecast for the year.
The solid first quarter results included a surge in a key sales measure that also dominated analysts’ forecasts.