US shares ended the month on a high note on Friday, as oil prices supported the market still lapping up some strong tech sector performance in the second quarter earnings season and putting the Brexit factor out to dry.
Even disappointing second quarter GDP numbers during the session failed to dent the market’s resilience.
The market bellwether S&P 500 closed up 0.2% at 2,173 – having marked an intraday record high of 2,177.09.
The 3.6% advance this month was the ticker’s best since March when the market recovered from the February nadir for equities and represented the fifth successive monthly gain for the benchmark index.
The S&P 500 was also comfortably up from 2,100 where it began the month, when investors panicked over the possible global impact of Britain’s decision to quit the European Union in a June 23 referendum. Since then, even the Federal Reserve has said near-term risks had diminished and the S&P 500 enjoyed a month of almost daily record highs.
The S&P Midcap 400 also fared well, gaining 0.4% on the day to 1,559. It too has jumped from a July 1 level of 1,494 as Britain’s so-called Brexit factor waned.
The S&P Smallcap 600 rose 0.1% to 743 on Friday, versus 706 at the start of July, while the wider small-cap Russell 2000 advanced by 0.3% on Friday to 1,220 – its highest level in nearly a year and compared with 1,151 on July 1.
Apart from Brexit waning has a factor and strong earnings results this month, the Friday gains also were in part thanks to gains by oil prices. The West Texas Intermediate rose by 0.78% to $41.46 as it tried to dig out of mid-April lows.
Midsession
US shares marked a record intraday high at midsession on Friday – even if the influential gross domestic product print disappointed.
The S&P 500 market bellwether was up 0.2% at 2,174. Earlier, it scaled a new high of 2,177. The ticker was also on target to mark the best monthly gain since March when it rebounded from February’s 2016 nadir.
US second quarter growth came in well below expectations today, fuelling a reassessment of rate rise expectations and hitting the dollar. Here’s a round up of what economists are saying.
The US economy grew at an annualised pace of 1.2% in the three months to the end of June, a modest acceleration from 0.8% in the first quarter, but less than half the 2.5% forecast by economists.
“The big contrast remains between the consumer which is providing all the growth and industry which is struggling to grow at all. The Q2 miss was mainly due to inventories i.e. some huge destocking. The result of this data is likely to scare the Fed again about any start to normalising interest rates from their still emergency levels,” said Jamie Constable, equity sales, at N+1 Singer in London.
One factor which helped support the bourse was that oil prices remained firm. The West Texas Intermediate was up 0.8% at $41.46.
The S&P Midcap 400 was up 0.5% at 1,560, led by IT services company Fair Isaac and Company Inc (NYSE:FICO), up 11.4% at $129.04.
The S&P Smallcap 600 was up 0.12% at 743 and led by Gulf Island Fab (NASDAQ:GIFI), up 27.2% to $8.65.
Open
US shares were mixed at the off, with the tech heavy Nasdaq the only one in positive territory, as traders mulled latest economic data.
The Nasdaq index added 0.02% to stand at 5,155, while the S&P500 lost 0.07% to go to 2,168.
The Dow Jones Industrial index was down 0.3% to 18,400 at the time of writing.
Crude prices took a bashing and hit the big names like Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) on the Dow Jones industrial average.
The US economy expanded less than forecast in the second quarter as firms are wary in the face of global factors.
Gross domestic product (GDP) rose at a 1.2% annualized rate after a 0.8% advance.
The median forecast of economists surveyed by Bloomberg called for a 2.5% second-quarter increase.
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PREVIEW
US shares are poised for a mixed start after stocks were buoyed by tech earnings yesterday from the likes of Amazon.com Inc (NASDAQ:AMZN) and social network Facebook (NASDAQ:FB).
Also in focus are second quarter GDP numbers in the US, which may shed light on whether the US economy bounced back fro m the first-quarter slump or is stuck in a a holding pattern.
Wall Street shares closed out Thursday with the Dow Jones down 16 at 18, 456, the Nasdaq up 15 at 5,154 and the S&P500 up almost four at 2,170.
In futures today, the S&P500 is down three; the Nasdaq is up 2.25 and the Dow Jones is down 30.
Google shares are powering higher in pre-market, up 4% as parent company Alphabet said its mobile and video business had prompted strong results in the second quarter.
The group reported profits of US$4.9bn from revenues of US$21.5bn for the third quarter.
In London, FTSE100 is down nine at the time of writing, while the German DAX is up 0.18% to 10,292.
The oil price, of US crude, is down 0.83% to stand at US$40.83 a barrel.