U.S. Stocks Finish Volatile Session Mostly Higher

(RTTNews) - After showing an initial move to the upside, stocks saw considerable volatility over the course of the trading session on Friday. The major averages showed wild swings as the day progressed but largely maintained a positive bias.

Eventually, the major averages ended the day firmly in positive territory. The Dow rose 73.38 points or 0.3 percent to 26,599.96, the Nasdaq climbed 38.49 points or 0.5 percent to 8,006.24 and the S&P 500 advanced 16.84 points or 0.6 percent to 2,941.76.

Despite the gains on the day, the major averages all moved lower for the week. The Dow fell by 0.4 percent, while the Nasdaq and the S&P 500 both dipped by 0.3 percent.

The volatility on Wall Street came as traders looked ahead to the highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Japan.

Trump and Xi are not expected to come out of the meeting with a finalized trade deal, but traders will be looking for signs of progress toward kick-starting the stalled negotiations between the two economic superpowers.

Some buying interest was generated in reaction to news that all 18 of the largest banks in the U.S. passed the Federal Reserve's annual stress test.

The Fed said it is not objecting to the capital plans of the 18 firms but is requiring the U.S. division of Credit Suisse to address limited weaknesses identified from the test.

Financial giants such as Goldman Sachs (GS), J.P. Morgan (JPM), Bank of America (BAC) and Citigroup (C) celebrated by announcing dividend increases and share repurchases.

Traders were also digesting some mixed economic data, including a report from the Commerce Department showing personal income increased by more than expected in the month of May.

Personal income climbed by 0.5 percent in May, matching the advance seen in April. Economists had expected income to rise by 0.3 percent.

The report also said personal spending rose by 0.4 percent in May following an upwardly revised 0.6 percent increase in April. The spending growth matched economist estimates.

Meanwhile, a separate report from MNI Indicators unexpectedly showed a contraction in Chicago-area business activity in the month of June.

MNI Indicators said its Chicago business barometer tumbled to 49.7 in June after rising to 54.2 in May, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the index to edge down to 53.1.

With the much steeper than expected decline, the Chicago businesses barometer dropped below 50 for the first time since January of 2017.

Sector News

Oil service stocks showed a substantial move to the upside on the day, driving the Philadelphia Oil Service Index up by 2.6 percent. With the jump, the index reached its best closing level in over a month.

The rally by oil service stocks came despite a notable decrease by the price of crude oil, as crude for August delivery slumped $0.96 to $58.47 a barrel.

Significant strength was also visible among biotechnology stocks, as reflected by the 2.1 percent jump by the NYSE Arca Biotechnology Index.

Financial stocks also saw considerable strength on the day, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index advancing by 2 percent and 1.5 percent, respectively.

Natural gas, transportation and computer hardware stocks also turned in strong performances, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index dipped by 0.3 percent, while China's Shanghai Composite Index slid by 0.6 percent.

Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the French CAC 40 Index advanced by 0.8 percent and the German DAX Index jumped by 1 percent.

In the bond market, treasuries showed a lack of direction before closing roughly flat As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.00 percent.

Looking Ahead

Reaction to the outcome of this weekend's Trump-Xi meeting is likely to drive trading early next week, overshadowing reports on manufacturing activity and construction spending.