By Sara Sjolin, MarketWatch , Ryan Vlastelica
IBM shares decline
U.S. stocks rose modestly on Friday, suggesting major indexes
would close out a positive week on the back of strong corporate
earnings, although the prospect of a looming government shutdown
kept buyers in check.
While a shutdown is seen as having little impact on the pace of
economic growth, such an outcome would add another element of
uncertainty to a market that is already seen as trading at lofty
levels, and which hasn't seen even a mild decline in more than a
year.
Read: A government shutdown 'could reintroduce investors to the
fact that markets go down'
(http://www.marketwatch.com/story/a-government-shutdown-could-reintroduce-investors-to-the-fact-that-markets-go-down-2018-01-19)
What are stock indexes doing?
The Dow Jones Industrial Average fell 10 points to 26,009,
essentially unchanged on the day. The S&P 500 rose 6 points, or
0.2%, to 2,804. The Nasdaq Composite Index rose 19 points, or 0.3%,
to 7,314. The S&P is poised to set a record at the close of
trading on Friday, as it will mark 395 sessions since it has fallen
5%, an unprecedented length of time
(http://www.marketwatch.com/story/heres-another-milestone-the-sp-500-could-surpass-this-month-2018-01-03).
All three are trading within 1 percentage point of record
levels. For the week, the Dow is up 0.9%, while the S&P 500 has
gained 0.7% and the Nasdaq is up 0.8%.
Both the Dow and the S&P are set for their third straight
weekly advance, as well as their eighth of the past nine. The
Nasdaq is also set for its third positive week in a row, as well as
its fifth positive week of the past six.
Read:Here's how stocks handled past government shutdowns
(http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)
Even with the uncertain political backdrop, stocks have been
able to continue their march higher in 2018. The S&P 500 is up
4.7% this month, while the other major benchmarks have jumped more
than 5%. The solid start to the new year comes on signs economic
growth remains strong and corporate earnings are picking up.
Read: Why ditching stocks in this bull market is a 'dangerous'
move
(http://www.marketwatch.com/story/dont-ditch-the-bull-market-its-dangerous-to-be-out-of-stocks-top-uk-fund-manager-says-2018-01-16)
What are strategists saying?
"I would characterize a shutdown as just the kind of political
news that the market has demonstrated, over the past year, a
willingness to ignore," said Hank Smith, co-chief investment
officer at Haverford Trust, which manages $8 billion. He said that
"the market is reacting to GDP growth both here and abroad, and
corporate profits, which are growing by double-digit rates and are
healthy, interest rates that remain low despite a gradual uptick,
and benign inflation."
Boris Schlossberg, managing director of FX strategy, in a Friday
note, said: "The government shutdown per se may not have much
economic impact on the U.S. economy, but the specter of uncertainty
that it could spread through the general economy could dent
investor sentiment especially if the drama in DC turns into a
protracted battle of the wills."
Which stocks are in focus?
Chipmakers rallied on optimism over the group's upcoming
earnings, with Mizuho analyst Vijay Rakesh saying that chip pricing
trends were positive
(http://www.marketwatch.com/story/chip-pricing-trends-could-boost-amd-nvidia-and-micron-results-analyst-2018-01-19).
Advanced Micro Devices Inc.(AMD) rose 3.1% while Nvidia Corp.(NVDA)
was up 2%.
Shares of International Business Machines Corp.(IBM) dropped
2.3% after the tech company late Thursday reported a fourth-quarter
loss
(http://www.marketwatch.com/story/ibm-shares-fall-despite-first-revenue-growth-in-5-years-2018-01-18)
due to a $5.5 billion one-off charge from the recently-passed tax
legislation.
American Express Co.(AXP) fell 2.6%. The credit card company
late Thursday recorded its first quarterly loss
(http://www.marketwatch.com/story/amex-reports-first-loss-since-1992-due-to-tax-hit-2018-01-18)
in over a quarter-century and said it would suspend its share buy
backs in response to a hit from the corporate tax cut.
Shares of Acorda Therapeutics Inc. (ACOR) rose 9% on reports
that it was closing in on a buyer
(https://seekingalpha.com/news/3323826-potential-suitors-eyeing-acorda-therapeutics-shares-ahead-9-percent-premarket).
Shares of Square Inc. (SQ) rose 5% after analysts at Instinet
raised their target
(http://www.marketwatch.com/story/square-stock-jumps-after-instinet-raises-price-target-to-64-new-street-high-2018-01-19)
price to $64, by far the highest among Wall Street analysts tracked
by FactSet.
Tobacco companies rose, with Philip Morris International
Inc.(PM) up 1.8% and Altria Group(MO) adding 1.6%. Both were among
the biggest gainers in the consumer staples sector, which was
itself the top-performing industry of the day, up 0.6%.
Travel retailer Hudson Ltd. (HUD.V) set the terms for its
planned initial public offering on Friday
(http://www.marketwatch.com/story/travel-retailer-hudson-sets-ipo-terms-to-offer-349-million-shares-at-19-to-21-a-pop-2018-01-19),
saying it will offer 34.9 million shares priced at $19 to $21
each.
Read:More than half of S&P 500 stocks are up 20% or more
since Trump took office
(http://www.marketwatch.com/story/more-than-half-of-sp-500-stocks-are-up-20-or-more-since-trump-took-office-2018-01-19)
What's on the economic calendar?
At 10 a.m., Eastern consumer sentiment for January is slated for
release.
Federal Reserve Vice Chair Randall Quarles will speak on bank
regulation to the American Bar Association in Washington at 1
p.m.
See:MarketWatch's economic calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
What are other markets doing?
The ICE U.S. Dollar index was down 0.1% at 90.350
(http://www.marketwatch.com/story/dollar-slides-back-to-3-year-low-on-fears-of-government-shutdown-2018-01-19),
with currency traders paying more attention to the shutdown issue
in Washington.
Oil prices also slumped
(http://www.marketwatch.com/story/oil-prices-sink-1-head-for-biggest-weekly-loss-since-oct-2018-01-19),
staying lower after the International Energy Agency said shale
producers would help drive U.S. production to levels not seen since
the 1970s.
Gold prices
(http://www.marketwatch.com/story/gold-bounces-back-as-dollar-falls-on-us-shutdown-concerns-2018-01-19)(GCG.T)
rose 0.5%, getting a boost from the weaker dollar.
Asian stock markets closed mainly higher
(http://www.marketwatch.com/story/asian-markets-start-off-quiet-with-investors-eyes-on-us-shutdown-2018-01-18),
inspiring an upbeat session in Europe as well.
(END) Dow Jones Newswires
January 19, 2018 10:00 ET (15:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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