Market Snapshot: Dow, S&P and Nasdaq all commerce at data after retail gross sales, commerce optimism rebound

U.S. stock indexes rose to fresh record highs Friday after data on retail sales rebounded to show growth in October and after White House officials again talked up the prospects of a trade deal with China.

The S&P500 index is heading for a sixth week of gains, it’s longest winning streak since November 2017 when the market rose for eight straight weeks. The Dow looked likely to post a fourth straight week of gains.

How are the major benchmarks faring?

The Dow Jones Industrial Average 

DJIA, +0.61%

rose 152 points, or 0.5%, to 27,934, while the S&P 500 index  

SPX, +0.60%

gained 17 points, or 0.6%, to trade at 3,114. The Nasdaq Composite index 

COMP, +0.60%

gained 50 points, or 0.7%, to 8,528.

All three benchmarks were trading above their previous record closes and set new intraday highs Friday.

On Thursday, the Dow  ended marginally lower, falling 1.63 points to 27,781.96, a day after eking out a record close. The S&P 500, meanwhile, tiptoed further into uncharted territory with a rise of 2.59 points, or 0.1%, to end at 3,096.63 — it’s 21st record close of 2019. The Nasdaq Composite  edged 3.08 points lower, a decline of less than 0.1%, to finish at 8,479.02.

For the week, the Dow is on pace to rise 0.7%, the S&P 0.5% and the Nasdaq less than 0.6%.

Read: ‘Hindenburg Omen’ and ‘Ohama Titanic Syndrome’ form in a key stock-market index

What’s driving the market?

Equities markets have posted gains this week as investors remain hopeful that positive developments in U.S.-China trade relations will soon justify recent record highs for the major stock indexes.

“Investors continue to hang onto every word associated with the U.S.-China trade war,” said Russ Mould, investment director at AJ Bell. “White House economic adviser Larry Kudlow reportedly said that current negotiations between the two countries are ‘very constructive’, which was enough to drive stock markets up across the U.K., mainland Europe and most of Asia.”

Kudlow on Thursday said negotiators are getting close to an agreement, but that President Donald Trump wasn’t yet ready to sign off. Trump “likes what he sees, he’s not ready to make a commitment, he hasn’t signed off on a commitment for phase one, we have no agreement just yet for phase one,” he said at a Council on Foreign Relations event, according to The Wall Street Journal.

The first phase of an agreement that may have as many as three phases will be “relatively limited in scope,” with the major focus being on “current trade” and whether China is willing to commit to $40 billion to $50 billion of agriculture purchases, Commerce Secretary Wilbur Ross told Fox Business on Friday.

U.S. economic data also provided some evidence that consumers remain willing to spend, though at a slower pace than earlier this year. U.S. retail sales growth rebounded in October, rising 0.3% after a 0.3% decline in September, above the 0.2% growth expected by economists surveyed by MarketWatch. Excluding autos and gasoline sales, however, sales rose 0.1%, below the 0.4% consensus forecast.

But U.S. industrial output fell by the most in 17 months in October, down 0.8%, worse than the 0.5% decline expected by economists polled by MarketWatch. Industrial capacity in use slumped to 76.7 in October, the lowest level in slightly more than two years.

“Net net, monetary policy is in a good place but the road ahead for the economy looks rockier with the manufacturing recession deepening and consumers spending less this quarter than they did earlier in the year,” MUFG chief economist Chris Rupkey said. “The question is whether the economy is in a good place and whether stock market investors are blithely ignoring today’s real economic data news in favor of their hopes and dreams for a better tomorrow with a phase one U.S.-China trade deal in sight.”

Which stocks are in focus?

Shares of Applied Materials Inc.

AMAT, +8.85%

 jumped after earnings beat Wall Street expectations even though the chip company late Thursday reported a fall in profit from a year ago. The chip makes outlook though also pointed to a recovery for the beaten-down semiconductor industry.

Chip maker Nvidia Corp.

NVDA, -2.40%

 late Thursday forecast a return to revenue growth after four quarters of declines and beat estimates for its quarterly results but shares fell.

Shares of furniture maker RH

RH, +7.63%

 were up more than 6% Friday after Warren Buffett’s Berkshire Hathaway Inc.

BRK.B, +0.02%

BRK.A, -0.09%

 revealed in a regulatory filing that it had bought 1.2 million shares of the company formerly known as Restoration Hardware.

Berkshire also revealed that it owned nearly 7.5 million shares of Occidental Petroleum Corp.

OXY, +2.91%

 worth around $332 million as of the end of the third quarter. Berkshire in April committed $10 billion to help Occidental in its bid for Anadarko Petroleum Corp, giving the company an edge over Chevron Corp.

CVX, -0.24%,

which later bowed out of the fight for Anadarko.

Shares of J.C. Penney Co. Inc. rallied more than 7% after the department store retailer reported narrower-than-expected losses in the third quarter.

How are other markets trading?

The yield on the 10-year U.S. Treasury note

TMUBMUSD10Y, +0.62%

 rose 1.6 basis points to 1.828% on rising trade hopes, after falling to a weekly low on Thursday.

The price of a barrel West Texas Intermediate crude oil for December delivery

CLZ19, +1.83%

 rose 94 cents, or 1.7% to $57.71, though the commodity was still on track for weekly losses. The price of an ounce of gold for December delivery

GCZ19, -0.43%

 declined $4.90, or 0.3%, to $1468.50 as the safe haven lost appeal.

The value of the U.S. dollar edged 0.2% lower, according to the ICE U.S. Dollar index

DXY, -0.17%.

In Europe, stocks were trading mixed, with the Stoxx Europe 600

SXXP, +0.40%

 up 0.4%

In Asia overnight Thursday, stocks traded mixed, with the China CSI 300

000300, -0.74%

 falling 0.7% and the Shanghai Composite index

SHCOMP, -0.64%

 declining 0.6%. Japan’s Nikkei 225

NIK, +0.70%,

meanwhile, rose 0.7% while Hong Kong’s Hang Seng index

HSI, +0.01%

 was virtually unchanged on the session.

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