Portfolio

US close: Stocks close near record highs as JPMorgan and Disney put on a show

By Iain Gilbert

Date: Friday 12 Apr 2019

US close: Stocks close near record highs as JPMorgan and Disney put on a show

(Sharecast News) - US stocks closed higher on Friday as bellwether JPMorgan Chase kicked off the first-quarter earnings season with a solid performance and Disney shot up after announcing its foray into the streaming world.
At the close, the Dow Jones Industrial Average was up 1.03% at 26,412.30, while the S&P 500 moved 0.66% firmer to 2,907.41 and the Nasdaq closed 0.46% stronger at 7,984.16.

The Dow closed 269 points higher on Friday as JPMorgan Chase led the way, putting on a solid rally after the bank's first-quarter profit and revenue beat analysts' expectations. The S&P 500 closed out the week just shy of topping an all-time high set back in late September, with the other two benchmarks closing within 2% of their own records.

JPM shares closed 4.69% higher after revealing that profit had risen 5% to $9.18bn or $2.65 a share, exceeding expectations of around $2.35 a share. Revenue was also up 5%, to $29.9bn, coming in about $1.5bn better than expected.

Wells Fargo wrapped up the week 2.64% lower despite its first-quarter numbers seeing net income climb 14% year-on-year on the back of cost-cutting exercises and a lower than expected drop in revenues.

Anadarko Petroleum shares surged 32.01% in the session after it agreed to be bought by Chevron in a $33bn cash and stock deal.

Walt Disney closed 11.54% higher after announcing a streaming service aimed at rivalling Netflix, whose shares fell 4.49% on Friday.

Elsewhere, Tracon Pharmaceuticals shares tumbled 49.05% after the company announced the termination of a late-stage trial of a cancer treatment.

Market participants also digested some mixed data out of China.

Exports surged past expectations in March, rising 14.2% in US dollar terms from the previous year amid the ongoing trade dispute with the US, following a 20.8% drop in February.

However, imports declined 7.6% compared to a 5.2% fall the month before. Analysts had been expecting exports to rise 6.5% and imports to edge up 0.2%.

Meanwhile, new loans and lending jumped higher in March, with M2 money supply up 8.6% on the year versus expectations for an 8.2% increase, and new loans coming in at 1.69 trillion yuan compared to expectations of 1.25 trillion.

David Cheetham, chief market analyst at XTB, said: "Compared to levels seen in recent years these figures aren't actually that elevated, but they do represent a pick-up compared to the latest numbers and suggest the world's second-largest economy is scaling back on its deleveraging efforts in a bid to bolster growth.

"In itself, this data could be described as only mildly supportive of risk assets but the clear positive market reaction reveals how both equities and crude oil retain a heightened sensitivity to good news at present, while looking through any negatives - a pleasing scenario for bulls."

Elsewhere on the data front, US import prices grew for a third consecutive month in March, driven by higher fuel prices.

The Labor Department revealed that import prices had risen 0.6% in March, boosted by increased fuel costs and industrial supplies, while data for February was upwardly revised to show a 1% increase in import prices, the largest monthly advance in almost three years.

Petroleum prices rose 4.7% last month, slowing from February's 9.7% gain and industrial supplies and materials increased 2.7%

Lastly, US consumer sentiment fell in for the first time in three months in April, falling short of estimates, as the long-term economic outlook dropped to its lowest level in more than twelve months.

The University of Michigan's preliminary sentiment index decreased to 96.9 from last month's 98.4 reading. Economists had expected a reading of 98.2.

The gauge of current conditions rose to a four-month high of 114.2, while the expectations gauge fell to 85.8.

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