Stocks Finish Lackluster Session Modestly Higher - U.S. Commentary

(RTTNews) - After ending the previous session substantially higher, stocks turned in a relatively lackluster performance during trading on Friday. Despite the choppy trading, the Nasdaq hit a new record high and the S&P 500 reached its best closing level in five months.

The major averages fluctuated over the course of the session before closing modestly higher. The Dow rose 94.52 points or 0.4 percent to 25,019.41, the Nasdaq inched up 2.06 points or less than a tenth of a percent to 7,825.98 and the S&P 500 edged up 3.02 points or 0.1 percent to 2,801.31.

For the week, the Dow surged up by 2.3 percent, while the Nasdaq and the S&P 500 jumped by 1.8 percent and 1.5 percent, respectively.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves on the heels of the considerable volatility seen over the past few sessions.

Traders were also digesting mixed quarterly results from financial giants JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC).

JPMorgan Chase ended the day moderately lower despite reporting second quarter results that exceeded expectations on both the top and bottom lines.

Meanwhile, shares of Wells Fargo showed a significant move to the downside after the bank reported second quarter earnings and revenues that came in below analyst estimates.

Citigroup also came under pressure after reporting better than expected second quarter earnings but on revenues that came in below expectations.

In U.S. economic news, the Federal Reserve delivered its semi-annual monetary policy to Congress, offering few surprises.

The Fed described economic growth in the first half of the year as solid and reiterated it expects further gradual increases in interest rates.

"The Federal Reserve remains positive on the U.S. economic outlook with barely any mention of the trade or yield curve worries that are preoccupying markets," said James Knightley, Chief International Economist at ING.

Meanwhile, the University of Michigan released a report showing an unexpected decrease in consumer sentiment in the month of July due to concerns about potential impact of tariffs.

The preliminary report said the consumer sentiment index dipped to 97.1 in July from the final June reading of 98.2. Economists had expected the index to come in unchanged.

A separate report released by the Labor Department showed an unexpected decrease in import prices in the month of June but a slightly bigger than expected increase in export prices.

The Labor Department said import prices fell by 0.4 percent in June after climbing by an upwardly revised 0.9 percent in May.

The pullback surprised economists, who had expected import prices to inch up by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

On the other hand, the report also said export prices rose by 0.3 percent in June following a 0.6 percent increase in May. Economists had expected export prices to edge up by 0.2 percent.

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

Energy stocks saw some strength amid a rebound by the price of crude oil, while weakness was visible in the telecom and banking sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index spiked by 1.9 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index both rose by 0.4 percent.

In the bond market, treasuries moved moderately higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.2 basis points to 2.831 percent.

Looking Ahead

Earnings news is likely to continue to impact trading next week, with a slew of big-name companies due to report their quarterly results as earnings season heats up.

Bank of America (BAC), Netflix (NFLX), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), American Express (AXP), IBM Corp. (IBM), Microsoft (MSFT), and General Electric (GE) are among the companies due to report their results next week.

The earnings news may overshadow the economic data, although traders are still likely to keep an eye on reports on retail sales, industrial production, and housing starts.

Federal Reserve Chairman Jerome Powell's two days of testimony on Capitol Hill are also likely to attract attention, as traders look for clues about the outlook for interest rates.

The media spotlight is also likely to be on President Donald Trump's highly anticipated meeting with Russian President Vladimir Putin in Helsinki, Finland, on Monday.