US stocks claimed fresh intraday record highs on Friday and the session closed higher as the market was impressed with how the White House handled meets or calls with both China’s and Japan’s top decision makers.
The S&P 500 market bellwether scaled a new peak of 2,319.23 before closing up 0.4% at 2316.
The Dow Jones Industrial Average hit a record high of 20,298.21 before closing up 0.5% at 20,269. Meanwhile, the Nasdaq Composite marked new territory at 5,743.43 before closing up 0.3% at 5734.
The gains came despite US President Donald Trump predicting a “level playing field” on currencies and trade, renewing his promise to take measures to allow America to compete more fairly on the global market. As noble has that might sound, it also hints at a collision course with other major economies.
Trump, who effortlessly pulled the US out of the 12-nation Trans-Pacific Partnership during his first week in office, said in a joint press conference with Japanese Prime Minister Shinzo Abe that the US seeks a trade relationship that is “free, fair and reciprocal benefiting both of our countries”.
He also said that both Japan and US should continue to invest in the alliance to build up defence and defensive capabilities.
The US and Japan combined dictate one-third of the world’s trade but the remarks from Trump did lay claim to further protectionist rhetoric just hours after he spoke with his Chinese counterpart and appeared to thaw on relations with the world’s second-biggest economy.
Meanwhile, copper prices rose to their highest levels in almost two years Friday after miner BHP Billiton (NYSE:BHP) declared force majeure on copper shipments from the world’s largest copper mine following a strike.
The price of copper jumped 4% on Friday to a high of $6,083 a tonne on the London Metal Exchange, the highest level since June 2015.
Workers decided to strike at the Escondida mine on Thursday after talks broke down with the company on benefits. BNP ADRs closed up 2.2% at $40.09 in New York.
The top S&P 500 gainer was Activision Blizzard (NASDAQ:ATVI), up 18.8% to $47.21 after the company posted fourth-quarter 2016 earnings and announced extensive shareholders return plans.
The S&P Midcap 400 closed up 0.6% at 1720 and was led by Skechers U.S.A. (NYSE:SKX) up 19.4% to $27.79 which continued with dismal earnings for its third successive period, but the stock gained on solid sales.
The S&P Smallcap 600 closed up 0.8% at 849 and led by Computer Programs (NASDAQ:CPSI) up 12.7% at $27.05. The community healthcare solutions company announced its fourth quarter earnings the previous session.
Early trading
US stocks marked a fresh record high on Friday in spite of data showing that consumers are divided on whether President Donald Trump will be good for the world’s biggest economy.
The University of Michigan’s consumer sentiment index slipped to 95.7 in February, after reaching 98.5 in the previous month — the highest mark in more than a decade.
Sentiment took a hit from a 5.1% decline in consumer expectations, driven by a deep partisan divide that has come to the forefront with the election in November of US President Donald Trump. The outlook among Republicans is near its historic high, suggesting a continuation of economic expansion. But for Democrats, it is close to a historic low, pointing to a recession.
Given that voters voted more or less 50-50 for the two front-running candidates in November, it means the survey is at a crossroads in terms of what next for the economy. A decision which will be settled for them based upon Trump’s policies.
The Dow Jones Industrial Average was up 0.4% at 20,255 having earlier marked a fresh intraday record high of 20,262.68.
Similarly, the tech-heavy Nasdaq Composite, up 0.3% at 5730, hit a record of 5,732.31 in the wake of a US court blocking Trump’s travel ban proposals overnight.
The S&P 500 was up 0.3% at 2314. It too hit a record at 2,315.14. The market bellwether was led by Activision Blizzard (NASDAQ:ATVI), up 16.7% at $46.35 after the company posted fourth-quarter 2016 earnings and announced extensive shareholders return plans.
Fourth-quarter 2016 adjusted earnings of 86 cents and revenues (including deferrals) of $2.452 easily beat the respective Zacks Consensus Estimate of 72 cents and $2.265 billion. On a year-over-year basis, revenues were up nearly 81%.
The S&P Midcap 400 was up 0.4% at 1718 and led by sports footwear group Skechers U.S.A. (NYSE:SKX) which continued with dismal earnings for its third successive period, but the stock gained on solid sales.
The S&P Smallcap 600 was up 0.5% at 846 and led by Computer Programs (NASDAQ:CPSI), up 13.8% to $27.30.
Pre-Open
US stocks are expected to open firm on Friday s investors felt growing optimism that President Donald Trump may be toning down his protectionist rhetoric towards China, over corporate tax cut pledges – and a legal halt to the White House ambition to restrict inbound travel from some nations.
Trump committed to honoring the "One China" policy in a phone call on Thursday evening with his Chinese counterpart President Xi Jinping. Trump had previously upended decades of diplomatic protocol by taking a phone call with Taiwan's president.
Meanwhile, stocks sighed relief that the 9th District Court upheld a freeze on Trump’s travel ban aimed at seven mostly Muslim nations overnight.
The S&P 500 market bellwether and Dow Jones Industrial Average are indicated up 0.1% and the tech-heavy Nasdaq Composite is set to outperform, up 0.14%. Tech stocks are among the most hit by Trump’s travel ban plans.
Rising oil tends to be good for the bourse’s upward direction. Friday is no exception. Crude oil futures are getting a boost after the International Energy Agency said major oil producing nations are largely fulfilling their pledge to slash production.
Members in the oil cartel OPEC promised to slash production late last year. But there were doubts about whether all the countries would follow through, especially since weeks of data showing aggressive oil output by American drillers.
The IEA report should reduce those doubts, at least for now.
Crude prices are now roughly double where they stood a year ago. The West Texas Intermediate, the US oil benchmark, was up 1.6% at $53.86.
In stock specific news, British conglomerate Reckitt Benckiser (OTCMKTS:RBGLY), which owns consumer brands like Durex, has agreed to buy an infant formula maker, Mead Johnson Nutrition (NYSE:MJN).
The total value of the transaction, including debt, will be $17.9 billion. The companies said earlier this month that they were in talks about a deal.
Reckitt Benckiser will pay $90 in cash for each Mead Johnson Nutrition share, well above Thursday's closing price.
Mead Johnson shares were up 4.9% at $87.10 pre-market. Reckitt ADRs were up 0.2% at $18.18.
Meanwhile, shares in Sears Holdings (NASDAQ:SHLD) surged on Friday after the struggling US department store operator unveiled plans to cut its debt and pension obligations by at least $1.5bn and said it was looking to cut at least $1bn in annual expenses.
The company, which has seen the cost of insuring its debt against a default rocket over the past month and its shares sink to a record low this week, said the moves were aimed at improving its liquidity and strengthening its balance sheet.
Sears shares were up 42.6% at $7.90 pre-market.