Dow Ends Up on 'Constructive' Trade Talks; S&P 500 Logs Best Quarter Since 2009

  • The Dow Jones Industrial Average closed up Friday U.S. Treasury Secretary Steven Mnuchin said trade talks he held with China were “constructive.”
  • Ride-hailing company Lyft officially began trading Friday in the biggest U.S. IPO in five years. Shares opened at $87.24.
  • Shares of Well Fargo slipped 1.6% after embattled CEO Tim Sloan said he would be stepping down.

Wall Street Overview

Stocks finished the first quarter of 2019 on a high note Friday, with the S&P 500 posting its best quarter since 2009, as investors felt empowered by signs of progress in the U.S.-China trade talks, modestly higher fixed income yields, and the debut of Wall Street ride-hailing company Lyft .

U.S. Treasury Secretary Steven Mnuchin said in a tweet on Friday that he and U.S. Trade Representative Robert Lighthizer had concluded “constructive” trade talks in Beijing.

“The major indices have pushed higher (Friday) as progress has been made in relation to US-China trade talks,” said David Madden, a market analyst at CMC Markets UK. “The trade dispute has been prolonged, but in recent months, the bulk of the updates we have heard from the talks have been positive, and that has contributed to the rally in 2019.” Madden added that there were mixed economic reports from the U.S.

“Core PCE, the Fed’s preferred inflation measure, cooled to 1.8%, and undershot the 1.9% forecast,” he said. “Personal consumption and personal income came in at 0.1% and 0.2% respectively, and traders were anticipating 0.3% for both reports. The University of Michigan consumer sentiment report edged up to 98.4, from 93.8 and that is encouraging to see, but cold hard sales figures are more important that sentiment survey’s .The Chicago PMI fell to 58.7, from 64.7. The economic updates today are likely to encourage the Fed to keep their monetary policy on hold.”

The Dow Jones Industrial Average closed up 211 points, or 0.82%, to 25,929, the S&P 500 rose 0.67% and the Nasdaq climbed 0.78%.

For the quarter, the S&P 500 rose 13%, its best quarterly performance since the third quarter of 2009 when the bull market was just hitting its stride. The index also marked its best first quarter since 1998, according to LPL Senior Market Strategist Ryan Detrick. “A big start to the year historically has suggested the bulls could remain in charge the rest of the year,” Detrick said. “In fact, 9 of the past 10 times the S&P 500 was up at least 10% during the first quarter, the rest of the year was also in the green.”

Detrick noted that the current quarter’s performance followed a “really rough fourth quarter.” But he suggested that analysts had reduced estimates too much in reaction to the downturn in late 2018. “The economy can probably surprise” in the second half of this year,” he said, noting that April is historically strong for stock bulls.

U.S. consumer prices unexpectedly slowed in January compared with a year earlier. The Commerce Department said Friday that its price index for personal consumption expenditures, excluding food and energy, rose 1.8% over the past 12 months, following a 0.1% gain in January.

New home sales in the U.S. rose faster than expected in February, the Census Bureau said, in a sign that the housing market remains on a solid footing despite a slowdown in the economy. Sales rose 4.9% as some 667,000 new homes were sold during the month on a seasonally adjusted basis, up from a revised 636,000 sales in January

Ride-hailing company Lyft officially began trading on the Nasdaq Stock Market , with the first trade at $87.24 per share, well ahead of its expected range. Shares ended up 8.7% to $78.29.

“Exciting IPOs like these tend to drive a ton of interest in folks who typically are not entirely engaged with the market,” said Mike Loewengart, vice president of investment strategy at E*Trade. “Although, before investors go all in, there are some considerations. Keep in mind Lyft and IPOs on the docket have no track record to speak of and have yet to turn profit. That said, as we look back on the trajectory of the FAANGS, there could be opportunity here if you can stomach the potentially rocky ride. “

Shares of Well Fargo fell 1.6% to $48.33 after embattled CEO Tim Sloan told the company’s board that he will retire on June 30 and step down as chief executive, president and board member, effective immediately. The board elected C. Allen Parker, who previously served as the company’s general counsel, to serve as interim CEO and president.

AstraZeneca fell after the drugmaker signed a potential $6.9 billion deal with Japan’s Daiichi Sankyo to develop and market a breast and gastric cancer treatment. Shares were down 5.9% to $40.43.

CarMax climbed 9.5% to $69.75 after beating Wall Street’s fourth-quarter and year-end expectations. Net earnings totaled $192.6 million, or $1.13 a share, up from $122.1 million, or 67 cents a share, a year ago. Net sales and operating revenue increased to $4.32 billion. Analysts surveyed by FactSet had been expecting earnings of $1.04 a share.

**

How Much Money Will I Need to Retire?

Want to learn about retirement planning from some of the nation’s top experts? Join TheStreet’s Robert “Mr. Retirement” Powell live in New York on April 6 for our Retirement Strategies Symposium. For a limited time, tickets are available for $99 for this full-day event. Check out the agenda, learn about the speakers and sign up here.