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Bank Stocks Lift S&P 500, Dow for Week -- WSJ

23 Sep 2017 6:32 am

Indexes' moves are slight despite tensions with North Korea, Fed rate-increase signal
By Georgi Kantchev and Corrie Driebusch 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 23, 2017).

The S&P 500 and Dow Jones Industrial Average eked out their second consecutive weekly gains, boosted by a rise in bank shares.

Stock moves have been muted in recent sessions, something traders and analysts attributed to a dearth of corporate news ahead of the start of the third-quarter earnings season.

The S&P 500 moved 12 points between its weekly peak and its low -- its smallest range since November 2014. In another sign of the calm in the markets, the CBOE Volatility Index, a measure of investors' expectations for swings in the S&P 500, fell Friday for the ninth time in 10 trading sessions.

Major indexes also were steady after the Federal Reserve signaled Wednesday that it could raise interest rates one more time this year and tensions escalated anew between North Korea and the U.S.

"There were North Korea jitters and the Fed this week, but for stocks we are in this quiet period in terms of getting ready for third-quarter earnings," said Dan Morgan, senior portfolio manager at Synovus Trust Co.

The S&P 500 rose 1.62 points, or less than 0.1%, to 2502.22 on Friday, rising less than 0.1% for the week.

The Dow industrials fell 9.64 points, or less than 0.1%, to 22349.59, rising 0.4% for the week.

The Nasdaq Composite added 4.23 points, or less than 0.1%, to 6426.92, but posted a 0.3% weekly decline.

Assets perceived as safer than stocks got a boost after North Korean Foreign Minister Ri Yong Ho said late Thursday in New York that the country may consider a nuclear test of "unprecedented scale" in the Pacific Ocean.

Those comments came after North Korean leader Kim Jong Un said he was considering the "highest level of hard-line countermeasure" in response to President Donald Trump's warning that the U.S. would annihilate North Korea if forced to defend itself or its allies.

This was likely causing investors to be "antsy heading into the weekend, " said Emmanuel Ng, an analyst at OCBC Bank.

Gold for September delivery rose 0.2% on Friday, although it ended the week down 2.1% at $1,293.30 a troy ounce.

Government bond prices rose Friday, with the yield on the benchmark 10-year U.S. Treasury note falling to 2.262% from 2.278% on Thursday.

Yields, which rise as bond prices fall, had climbed nine consecutive sessions through Thursday -- their longest such streak since March 2011.

Bond yields climbed after the Fed's suggestion that it could raise rates once more in 2017 and three more times next year caught some investors by surprise.

Weak inflation numbers in recent months had made some investors question how quickly the Fed could raise rates.

The rise in yields helped lift bank shares. Financial stocks in the S&P 500 rose 2.7% for the week, though on Friday they slipped less than 0.1%.

In the past two weeks, the sector has risen 6.1%, posting its best performance since the two weeks ended Nov. 18.

But after the Fed meeting Wednesday, investors now see a more than 70% chance of a rate rise by the end of the year, according to Fed-fund futures tracked by CME Group.

The Stoxx Europe 600 index rose 0.1% after falling in earlier trading, while major indexes across Asia finished mostly in the red.

In Japan, gains in the yen hurt the Nikkei Stock Average, which closed down 0.3%. A stronger currency weighs on the country's key export stocks.

Hong Kong's Hang Seng fell 0.8%, while South Korea's Kospi lost 0.7%.

Akane Otani contributed to this article.

Write to Georgi Kantchev at georgi.kantchev@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

September 23, 2017 02:32 ET (06:32 GMT)

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