U.S. stocks edged upward on Friday, the last trading day of September, as investors sorted through a batch of economic data that painted a mixed picture of the economy. Major indexes were mostly set for a week of solid losses though they have performed well over for the month and the quarter.
Where are the major benchmarks trading?
The Dow Jones Industrial Average
DJIA, +0.22%
rose 48 points, or 0.2%, to 26,488, and the S&P 500
SPX, +0.11%
gained 3 points, or 0.1%, to 2,917. The Nasdaq Composite Index
COMP, +0.08%
climbed 13 points, or 0.2%, to 8,055.
Key indexes’ performance data
| Week | Month | Quarter | |
| S&P 500 | -0.4% | 0.6% | +7.3% |
| Dow | -1% | +2% | +9.1% |
| Nasdaq | +0.8% | -0.7% | +7.2% |
Friday also represents the final trading day of the third quarter. Over the past three months, the S&P has risen more than 7%, which would be its biggest quarterly advance since the fourth quarter of 2013. The Dow is up about 9%; both the Dow and the S&P have risen in 11 of the past 12 quarters. The Nasdaq is up more than 7% over the quarter, and it is set for its ninth straight quarterly gain.
Don’t miss: Should investors fear October, a historic ‘jinx month’ for stocks?
What’s driving trading?
Recent trading has been relatively quiet on Wall Street, with few corporate earnings reports to drive the market. Despite the stock-market loss on the week, the trading range has been tight; the S&P hasn’t closed with a move of even 0.5% in either direction any day this week.
Geopolitical events may take center stage again in coming days after Italy’s antiestablishment government significantly widened its budget-deficit target for next year to fund its electoral promises, a move that will likely put it on collision course with the European Union. The issue is the latest bit of geopolitical turbulence that could impact Wall Street, following a currency crisis in Turkey earlier this summer.
Read: Italy’s budget drama: What you need to know
In the latest economic data, consumer spending rose 0.3% in August, the slowest pace since February. Personal income also rose by 0.3%. The 12-month increase in the PCE index, the Federal Reserve’s preferred inflation gauge, fell to 2.2% from 2.3%.
The Chicago Purchasing Manager’s Index fell to a five-month low 60.4 in September, below expectations for a reading of 62. A reading of consumer sentiment came in at 100.1 in September, slightly below expectations.
Issues surrounding trade policy also lingered. On Wednesday, President Donald Trump accused Beijing, without public evidence, of trying to interfere in the U.S. midterm elections and of attempting to damage him politically. The accusations come as a trade dispute between the two countries grows more heated with the imposition of a 25% tariff on more than $200 million of Chinese imports to the U.S.
While investors have repeatedly shrugged off the trade issue, focusing instead of strong economic data and corporate earnings, any additional developments on this front could dictate short-term market direction.
What are market analysts saying?
Ryan Detrick, senior market strategist at LPL Financial, said trading could become more eventful in the coming days, with October a strong month for stocks.
“October is probably one of the more misunderstood months,” he said. “It is best known for some spectacular crashes, like 1929, 1987 and 2008 — but the reality is it isn’t that bad overall, it is more an extremely volatile month. August and September historically can be weak, and this opens the door for the seasonally bullish fourth quarter, kicking off with October.”
He also noted that companies start to report third-quarter earnings in October, which could drive stock prices in either direction.
“Italy has been a big concern for weeks now, and if the situation gets worse you can expect the market to sell off in a meaningful way. The big issue is contagion: Will this spread? If it does, that could trigger a recession, which will drag down European GDP and also have a negative impact for U.S. multinationals,” said Adam Sarhan, chief executive of 50 Park Investments.
“For Tesla, a lot of Musk’s recent actions raise questions about his decision-making abilities,” he said. “If his tweet was just reckless behavior and ego, clearly that will be bad news for the stock. And if this issue means that the Nasdaq, one of the leading indexes this year, starts to turn lower, that would be a real cautious signal to me about growth stocks overall.”
What stocks are in focus?
Shares of Tesla Inc.
TSLA, -12.49%
sank 12% after the Securities and Exchange Commission sued Elon Musk, the electric-car maker’s chairman and chief executive officer. The SEC is alleging that Musk misled investors when he tweeted that he was considering taking the company private, and it is seeking to ban him from serving in his role of CEO.
While Tesla has a limited impact on the broader indexes — it isn’t a component of the S&P 500 — it is sometimes seen as a proxy for high-risk and high-growth stocks, a segment of the market that have been fueling the market’s gains in 2018.
J.C. Penney Co. shares
JCP, -5.20%
fell 6.1% after the retailer said that Chief Financial Officer Jeffrey Davis was resigning, effective Oct. 1.
BlackBerry shares
BB, +13.54%
rallied 13% after second-quarter results.
Shares of Applied Optoelectronics Inc.
AAOI, -13.36%
skidded 14% after the company cut its third-quarter revenue outlook.
Where are other markets trading?
Major European indexes fell, with Italy suffering its biggest one-day loss in more than two years after its budget issue. Asian stocks mostly rose, with Japan’s Nikkei hitting its highest level since 1991.
Crude-oil futures
CLK9, +1.86%
rallied, while gold
GCM9, +0.32%
climbed and the U.S. dollar index
DXY, +0.13%
edged up.
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Source : MTV
