S&P 500, Dow Industrials book smaller gains after indices stumble midday
US housing starts rise sharply in January
Alcoa US Stell rise on proposed import tariffs
Preliminary reading for the University of Michigan’s consumer sentiment index increased to 99.9 from 95.7 the previous month, above expectations of 95.5.
US stocks had a strong week despite stumbling into the homestretch Friday on news of indictments in the U.S. Justice Department's investigation of Russian interference in the 2016 presidential election.
The Dow Jones Industrial Average erased a triple-digit move upward in the morning to close at 25,219, only 19 points above the previous close, after news of the indictments broke. The benchmark S&P 500 finished one point higher at 2732. But the Nasdaq Composite failed to rebound, ending the day 17 points lower to 7239.
In Toronto, the S&P/TSX Composite added 45 points to 15,452.
Shares of US Steel (NYSE:X) and Alcoa (NYSE:AA) jumped on a recommendation from the US Commerce Department to impose tariffs on steel and aluminum imports.
MID-SESSION: Stocks pick up after consumer confidence boost
Stocks shook off their early lethargy to rack up healthy gains ahead of the long weekend.
The Dow Jones average was up 124 at 325,325 and the S&P 500 was up 13 at 2,745.
The market's mood was helped by US consumer confidence, which rose more than expected in February as Americans remained optimistic about jobs and economic growth.
The preliminary reading for the University of Michigan’s consumer sentiment index increased to 99.9 from 95.7 the previous month, above expectations of 95.5.
US Univ. of Michigan Sentiment Index Feb P: 99.9 (est 95.5; prev 95.7)
-Current Conditions Feb P: 115.1 (est 111.1; prev 110.5)
-Expectations Feb P: 90.2 (est 87.2; prev 86.3)
— LiveSquawk (@LiveSquawk) 16 February 2018
It marked the second-highest level in 14 years.
The index measures consumers' attitudes on future economic prospects, in areas such as inflation, personal finances, unemployment, interest rates and government policies.
Open: Stocks off to slow start as traders bank gains ahead of the long weekend
Gains were modest in early trading but the Dow Jones index was still on course for a bumper week.
The Dow was up 9 at 25,209 while the S&P 500 was down half a point at 2,731.
Both indexes were set to notch up their biggest gains on the week since the early part of this decade.
“This would also bring an end to two shocking weeks for equity markets that saw more than 10% quickly wiped off indices, the first time we’ve seen such a move since the start of 2016,” said Craig Erlam at OANDA.
“While the prospect of higher yields and interest rates, combined with a surge in volatility, have been blamed for the decline, the rebound we’re now seeing reaffirms the belief that fundamentals are still strong which should prevent the situation deteriorating further,” he opined.
US housing starts rose 10% in January to an annualized 1.33mln despite adverse weather conditions.
“The strong gain was driven by the volatile multifamily sector (449k from 363k), so this level of starts is unsustainable in the near term. Yet single-family starts also increased, suggesting that home ownership rates will continue to rise as the housing sector transitions to more solid ground,”commented Mickey Levy at German bank Berenberg.
MuleSoft Inc (NYSE:MULE) kicked on in early trading after a strong set of fourth quarter results.
The operator of a software platform for building application networks saw fourth-quarter revenue rise 60% from the year before to US$88.7mln.
The company still made a net loss per share of 12 cents.
Pre-open
Shares in The Coca-Cola Company (NYSE:KO) fizzed a little higher before the opening bell on Friday after the drinks giant beat Wall Street expectations with its fourth quarter earnings.
In the three months ended December 31, the Fanta and Minute Maid maker reported adjusted earnings of 39 cents per share, marginally ahead of the 38 cents analysts had been looking for.
That was on net sales of US$7.5bn - a 20% fall compared to the year-ago quarter which it attributed to headwinds from its efforts to re-franchise its bottling operations, but ahead of forecasts of US$7.4bn.
Foods group Kraft Heinz Co (NASDAQ:KHC) saw its shares slide 3.65 in pre-market trading after its adjusted earnings per share for the fourth quarter came in five cents shy of expectations at 90 cents.
Net sales were also on the light side at US$6.88mln and were down 0.6% year-on-year on a like-for-like basis.
“There's no question that our financial performance in 2017 did not reflect our progress or potential,” claimed Bernardo Hees, the chief executive officer of Kraft Heinz.
“We made significant improvements in many of our businesses, and were able to accelerate some important business investments at the end of the year. This, together with benefits from the US Tax Cuts and Jobs Act and additional investments in our capabilities, should help further advantage our brands and grow our business in 2018 and beyond,” he asserted.
Sector peer Campbell Soup Company (NYSE:CPB) was another stock getting it in the neck after releasing earnings this morning.
Net sales in the three months to January 28 rose to US$2.18bn from US$2.17bn the year before but were down 2% on a like-for-like basis.
Adjusted earnings per share rose 10% to US$1 from 91 cents, versus market expectations of 72 cents.
“This was a disappointing quarter, driven by continued challenges in US soup and Campbell Fresh,” admitted Denise Morrison, the president and chief executive officer of Campbell Soup.
“The decline in organic sales was largely due to the performance of Americas Simple Meals and Beverages, where US soup sales decreased by 7% based on the key customer issue we discussed last quarter. We are making progress with this customer and expect sales declines in soup to moderate in the second half,” she revealed.