Wall St advances on trade hopes amid investor pessimism
The S&P 500 steadily added to gains from late morning, while investors took weak data in their stride. The University of Michigan Surveys of Consumers said its Consumer Sentiment Index slumped further in May while one-year inflation expectations surged to 7.3 per cent from 6.5 per cent in April.
All three main indexes boasted weekly gains after starting out with a steep rally on Monday - after Washington and Beijing agreed to a 90-day pause in their escalating trade war. This was days after the US President and British Prime Minister announced a limited bilateral trade agreement.
Lindsey Bell, chief market strategist at Clearnomics, New York, said Friday's advance was a "carry on from the de-escalation in the trade conflict."
With a solid economy combined with pessimistic investors, Bell expects more volatility ahead as tariff headlines come out, and added that "data could change in coming months."
"I don't think we're out of the woods yet. We're going to have to take it on a day-by-day, week-by-week basis," she said.
Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said the market is "cautiously optimistic" about the softening stance on trade, but waiting to see where the US eventually lands on tariffs.
"We haven't even begun to see what happens when those tariffs really bite, when firms have to raise their prices to consumers and consumers see fewer goods and less variety on the shelves," said Christopher.
Investors were also left waiting for clarity on US tax policy as Trump's sweeping tax bill failed to clear a key procedural hurdle as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress.
The Dow Jones Industrial Average rose 331.99 points, or 0.78 per cent, to 42,654.74, the S&P 500 gained 41.45 points, or 0.70 per cent, to 5,958.38 and the Nasdaq Composite gained 98.78 points, or 0.52 per cent, to 19,211.10.
For the week, the S&P 500 gained about 5.3 per cent while the Nasdaq rose 7.2 per cent and the Dow added 3.4 per cent.
Among the S&P 500's 11 major industry indexes, most advanced with energy the sole loser, down 0.18 per cent.
The biggest gainer was healthcare, which ended up 1.96 per cent for the day after a volatile week.
One of its biggest index point boosts was from UnitedHealth Group Inc, which regained ground - rising 6.4 per cent on Friday and leading S&P 500 percentage gains - after eight straight days of steep losses.
Investors were warily expecting strategic changes at the insurer after the Wall Street Journal reported it was under a criminal probe by the Justice Department.
Among other individual stocks, Applied Materials shares slipped 5.3 per cent after the provider of equipment for chip manufacturing missed estimates for second-quarter revenue.
Charter Communications shares rose 1.8 per cent after the cable company said it would buy privately held rival Cox Communications for $US21.9 billion ($A34.1 billion).
Shares in Verizon Communications rose 1.7 per cent after the Federal Communications Commission said Friday it was approving its $US20 billion ($A31 billion) purchase of fibre-optic internet provider Frontier Communications after the largest US telecom company agreed to end its diversity, equity and inclusion programs.
Advancing issues outnumbered decliners by a 2.72-to-1 ratio on the NYSE where there were 207 new highs and 34 new lows.
On the Nasdaq, 2,792 stocks rose and 1,607 fell as advancing issues outnumbered decliners by a 1.74-to-1 ratio. The S&P 500 posted 28 new 52-week highs and no new lows while the Nasdaq Composite recorded 62 new highs and 73 new lows.
On US exchanges, 17.61 billion shares changed hands on Friday compared with the 17.04 billion average from the last 20 sessions.
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