U.S. stock indexes closed higher on Friday as investors shrugged off concerns about global trade tensions, but trading volume was relatively light ahead of a busy week of central bank meetings.
The S&P 500 reversed losses in the early afternoon and stayed in positive territory with its biggest boosts coming from the health care and consumer staples sectors.
Investors appeared to put aside worries about U.S. relations with its biggest trading partners after U.S. President Donald Trump arrived in Canada on Friday for what was expected to be a tense summit with other leaders of the G7 major countries.
French President Emmanuel Macron and Mr. Trump, who exchanged terse Twitter messages ahead of the summit, had a brief “very cordial” discussion about trade and North Korea, a French official said on Friday.
“Investors aren’t really trading on the big news of the day which is the G7,” Katrina Lamb, head of investment strategy and research at MV Financial, in Bethesda, Md.. “This stuff is going to matter at some point. The optics of the G7 alone are something that should concern people but in terms of the practical immediate effect probably not much.”
In the meantime, investors focused on expectations for strong growth among U.S. corporations, according to Lamb citing expectations for sales growth of more than 7 per cent this year. She also pointed to Wall Street estimates for 2018 earnings growth of 22.2 per cent, according to Thomson Reuters I/B/E/S.
“The math looks really good in terms of the relation between price and earnings and sales,” she said. “This is a perfectly good time to be long the market.”
The Dow Jones Industrial Average rose 75.12 points, or 0.3 per cent, to 25,316.53, the S&P 500 gained 8.6 points, or 0.31 per cent, to 2,778.97 and the Nasdaq Composite added 10.44 points, or 0.14 per cent, to 7,645.51.
Canada’s main stock index finished flat on Friday, weighed down by the energy sector.
The Toronto Stock Exchange’s S&P/TSX Composite index was up 9.91 points, or 0.06 per cent, at 16,202.69.
The energy sector dropped 0.7 per cent as oil prices fell on weakening demand in China and surging U.S. output weighed on markets.
Encana Corp. and Canadian Natural Resources Ltd. both dropped 0.8 per cent, while Husky Energy Inc. was down 0.7 per cent.
The biggest contributor to the TSX gain was Royal Bank of Canada, up 0.49 pe rcent, while financials was the top sector contributor, up 0.2 per cent.
Leading the index were Enghouse Systems Ltd, up 8.1 per cent, Transcontinental Inc, up 5.3 per cent, and Dollarama Inc , higher by 3.5 per cent.
Lagging shares were Nuvista Energy Ltd, down 4.6 per cent, Birchcliff Energy Ltd, down 4.2 per cent, and Prometic Life Sciences Inc, lower by 4.0 per cent.
In New York, the consumer staples index was the biggest percentage gainer of the S&P’s 11 major sectors. Its biggest driver was Procter & Gamble which continued its rally from the previous day with a 1.9-per-cent gain
Dragging on the S&P technology sector was Apple Inc and its suppliers which were down following a report that the iPhone maker was planning to produce fewer phones this year. Apple was down 0.9 per cent.
Investors were also likely preparing for the week ahead. The Federal Reserve is widely expected to hike rates for the second time this year but investors will be watching for signals from the U.S. central bank on its plans for the rest of the year.
An unprecedented U.S.-North Korea summit is also scheduled for June 12 in Singapore.
“Next week is a huge week for the news cycle, with the FOMC meet and the North Korea summit, there is probably a little bit of position squaring before the weekend,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management.
Benchmark U.S. crude slid 0.3 per cent to $65.74 a barrel in New York. Brent crude, used to price international oils, fell 0.6 per cent to $76.82 per barrel in London.
Wholesale gasoline stayed at $2.12 a gallon. Heating oil shed 0.7 per cent to $2.16 a gallon. Natural gas fell 1.4 per cent to $2.89 per 1,000 cubic feet.
Gold was little changed at $1,302.70 an ounce. Silver declined 0.4 per cent to $16.74 an ounce. Copper rose 0.8 per cent to $3.30 a pound, its highest price this year.
Overseas, Germany’s DAX was down 0.3 per cent and so was the FTSE 100 index in Britain. The CAC 40 in France rose less than 0.1 per cent. Japan’s benchmark Nikkei 225 shed 0.6 per cent and South Korea’s Kospi lost 0.8 per cent. In Hong Kong, the Hang Seng slipped 1.9 per cent.
Reuters and The Associated Press