U.S. Stocks Mixed as Traders Look Past GDP Report: Markets Wrap

  • Nasdaq 100 adds to record high on Amazon, Alphabet strength
  • Treasuries rise, oil closing in on $50 a barrel level

Hal Scott on the Rekindling of Trust in Wall Street

U.S. stocks finished near all-time highs Friday, Treasuries gained and oil closed in on $50 a barrel even after the world’s biggest economy reported its slowest pace of expansion in three years.

Global equities fell, trimming a sixth straight monthly advance, as geopolitical concerns linger. The Nasdaq 100 Stock Index added to its record peak as Alphabet Inc. and Amazon.com Inc. rose after reporting strong earnings late Thursday. In Europe, equities pared a third monthly gain.

“Overall, a soft report, but the Treasury market has sold off and we’ll argue that the market was simply looking for an ever weaker report,” BMO Capital Markets strategist Ian Lyngen wrote in research note after the U.S. gross domestic product figures were released.

Bond traders also are looking at the Bureau of Labor Statistics employment cost index, which climbed 8 percent in the first quarter, its largest gain since 2007 and a sign that wage growth is accelerating. This builds on data from Europe showing higher than expected price growth in April.

“The inflation data is more important than the miss in other components,” Anthony Cronin, a trader in New York at Societe Generale SA, wrote in an email. “It puts more pressure on the Fed and comes on the back of the strong European CPI print this morning.”

In addition, markets are in a state of flux as President Donald Trump fights an uphill legislative battle to turn his words into action and is keeping concerns over North Korea alive. The administration’s tax-cut plan and mixed signals on its view of Nafta stirred markets this week. The growth slowdown will cast doubt on the Federal Reserve’s resolve to raise interest rates two more times this year.

Now, eyes turn to Congress, which on Friday voted to give itself another week to agree on a spending bill that will fund the government through September.

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Here are the main moves in markets:

Stocks

  • The S&P 500 Index closed down 0.19 percent at 2,384.20, while the Dow Jones Industrial Average dropped 0.19 percent to 20,940.51 and the Nasdaq 100 rose 0.22 percent to 5,583.53. The small-cap Russell 200 Index sank 1.2 percent to 1,400.41.
  • The Stoxx Europe 600 Index slipped 0.18 percent, dropping for a second day after reaching the highest level since August 2015.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.14 percent in a rocky up-and-down session.
  • The euro gained 0.17 percent and the pound was up 0.36 percent.
  • The ruble strengthened as much as 0.6 percent after a bigger-than-forecast rate cut failed to reduce its carry-trade appeal.

Commodities

  • Oil climbed 0.43 percent to $49.18 a barrel, after tumbling 1.3 percent on Thursday. Crude is down nearly 3 percent this month.
  • Gold advanced 0.28 percent to $1,269.40. The metal rose 1.5 percent in April, its fourth monthly gain.

Bonds

  • The yield on 10-year Treasuries fell more than one basis point to 2.28 percent.
  • German benchmark yields rose two basis points to 0.32 percent.

— With assistance by Simon Ballard, Blaise Robinson, Stephen Spratt, Vassilis Karamanis, Sid Verma, James Herron, Brian Chappatta, Adam Haigh, Srinivasan Sivabalan, V Ramakrishnan, and Elizabeth Stanton

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