The Dow Jones Industrial Average Friday pulled back as optimism over the U.S.-China trade deal faded, with the Dow trading up a fraction despite a big post-earnings jump from Disney (DIS).
XStocks rallied this past week as markets were betting on hopes of a partial trade deal and the rollback of existing trade tariffs. But the headline-fueled optimism waned as new headlines cast doubt, causing modest volatility in Friday's market. All three indexes held on for weekly gains after hitting record highs on Thursday. The Dow traded about 1.2% higher for the week, while the Nasdaq rose 1% and the S&P 500 was up 0.8%.
On Friday, the Nasdaq climbed 0.5% and the S&P 500 was up 0.3% after a late rally. Volume was lighter on both the Nasdaq and the NYSE vs. the same time Thursday, according to preliminary data.
The bottom line is, if U.S.-China trade news is positive, expect a stock market rally. If news is negative or uncertain, investors can reasonably expect pullbacks and possibly, a market correction.
Dow Jones Today
Though stocks recovered from Friday's session lows, the Dow lagged the other major indexes as the majority of its 30 components traded lower.
Exxon Mobil (XOM), Chevron (CVX) and Walmart (WMT) were down 0.7% to 2%. Exxon and Chevron gave back last week's earnings gains while Walmart traded near its 50-day line. The retail giant is set to report earnings Thursday.
Disney stock topped the Dow, rising nearly 4% after beating analysts' fiscal Q4 estimates. The stock gapped up to well above the 50-day line on strong volume. Shares are roughly 7% away from a 147.25 buy point of a flat base.
The company reported earnings of $1.07 a share, beating estimates for 95 cents. Revenue rose 33.5% to $19.1 billion, also beating forecasts for $19.03 billion. Disney will officially launch its Disney+ streaming service next week.
IBD 50 Trades Higher
The Innovator IBD 50 ETF (FFTY) edged 0.2% higher. InMode (INMD) rose to a record high in morning trading before tapering off.
StoneCo (STNE), Boot Barn (BOOT) and Incyte (INCY) rose roughly 3% to 4% each. Software stocks Paycom Software (PAYC), Fortinet (FTNT) and Paylocity (PCTY) also traded higher.
Earnings Movers
Stocks moving on upside earnings surprises from Thursday include Monster Beverage (MNST), Stamps.com (STMP), and Planet Fitness (PLNT).
Monster and Planet Fitness gapped above their 200-day moving averages but closed below those levels.
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