Stocks around the world edged higher on Friday on robust earnings, with consumer staples results boosting Wall Street, though a trade spat between the United States and China along with tepid U.S. jobs numbers capped gains and weighed on the dollar.
U.S. job growth slowed more than expected in July as employment in transportation and utilities fell, but analysts said the numbers didn’t change their expectations for a September interest rate hike.
“With wages and salaries up 2.7 per cent, which is consistent with the 2.9-per-cent annual increase we saw for private sector workers in the June employment cost index report released earlier this week, a third rate hike in September is all but certain,” said Heidi Learner, chief economist at Savills Studley in New York.
Market participants were still focused on an escalating trade dispute between the United States and China, which proposed new tariffs on $60-billion worth of U.S. goods.
In Toronto, the S&P/TSX composite index unofficially closed up 11.08 points, or 0.07 per cent, at 16,420.24 despite a 0.4-per-cent drop in energy stocks and a 0.2-per-cent decline for the heavyweight financial sector.
In New York, based on the latest available data, the Dow Jones Industrial Average rose 135.81 points, or 0.54 per cent, to 25,461.97, the S&P 500 gained 13.09 points, or 0.46 per cent, to 2,840.31 and the Nasdaq Composite added 9.33 points, or 0.12 per cent, to 7,812.02.
For the week, the S&P 500 and Nasdaq posted gains, while the Dow was essentially flat.
The S&P consumer staples sector rose 1.2 per cent and led the gains among major S&P sectors, after getting a boost from Kraft Heinz Co earnings. Kraft Heinz jumped 8.7 per cent after beating profit and revenue estimates.
A fall in technology companies, such as Google parent Alphabet, which was down 0.6 per cent, and Activision Blizzard’s 3.7-per-cent drop, weighed down the Nasdaq.
MSCI’s gauge of stocks across the globe gained 0.35 per cent, while the pan-European FTSEurofirst 300 index rose 0.67 per cent.
According to Bespoke Investment Group, mentions of tariffs in S&P 500 company earnings reports for the second quarter have more than doubled from the first quarter of this year.
Following news of China’s retaliatory tariffs and the U.S. jobs data, yields on 7-year U.S. Treasury notes led a fall in U.S. government bond yields across maturities.
Benchmark 10-year notes last rose 9/32 in price to yield 2.9543 percent, from 2.986 per cent late on Thursday.
The 30-year bond last rose 17/32 in price to yield 3.0934 percent, from 3.121 per cent late the previous day.
Italy’s bonds had a volatile day, with yields soaring to eight-week highs early in the day over political tensions, then falling back by the close.
The U.S. dollar slipped against the yuan after the Chinese central bank raised the forward reserve requirement for foreign exchange in a bid to stabilize its currency. The dollar was 0.47 percent lower against the offshore yuan.
“Traders playing chicken against the People’s Bank of China got hit by a truck this morning,” said Karl Schamotta, a strategist at Cambridge Global Payments in Toronto. currency.
The dollar index, which measures the greenback against a basket of six other currencies, was flat on the day at 95.148, after dipping as low as 94.98. The index was up 0.5 per cent for the week.
Oil prices edged lower after Thursday’s rally, which was driven by an industry report suggesting U.S. crude stockpiles would soon decline after a surprise rise in the latest week.
U.S. crude oil futures settled at $68.49 a barrel, down 0.68 per cent. Brent crude futures settled at $73.21, down 0.33 per cent.