Stocks Close Volatile Week Higher; Crude Oil Falls: Markets Wrap

Cornelia Mascio
Mag 23, 2020

China's Communist Party is preparing to introduce a controversial national security law for Hong Kong that will prohibit "treason, secession, sedition and subversion".

The Canadian dollar subsided 0.32 cents early Friday to 71.37 cents U.S.

The Dow Jones Industrial Average fell 109.91 points to 24,364.21, while the S&P 500 slipped 5.89 points to 2,942.62 and the Nasdaq Composite Index dropped 3.96 points to 9,280.93.

Stocks dipped in early Friday trading following signs that China's economic recovery may not be as strong as hoped.

China scrapped its economic growth target for 2020 in a stark acknowledgment of the challenges facing the world's second-largest economy, sending crude oil and metal prices sharply lower.

USA markets will be closed on Monday for the Memorial Day holiday.

The Dow closed 101.78 points higher on Thursday as market participants digested another jobless report from the Department of Labor and news that the Senate had passed a bill that would make listings by Chinese firms on U.S. exchanges more hard led to fears of a ratcheting up in trade tensions between the world's two biggest economies.

Futures for the S&P 500 sailed 6.5 points, or 0.4%, higher at 2,943.50.

The run-up over the past week and more than 30 per cent climb since the late March lows is confirmation that investors think that a recovery is on its way despite concerns about a second wave of COVID-19 infections, said Kurt Reiman, chief investment strategist for BlackRock Canada. Smaller rival Pinduoduo Inc's US-listed shares gained 1% after posting upbeat earnings report.

Oil prices slid 55 cents to $33.37 US a barrel. The June gold contract was up US$13.60 at US$1,735.50 an ounce and the July copper contract was down 4.55 cents at almost US$2.39 a pound. The price has risen this month as oil producing nations cut back on output and the gradual reopening of economies around the globe have driven up demand.

In Toronto, six of the 11 TSX subgroups were in positive territory, led by information technology, health care and materials.

In the USA, energy (-2%) is the biggest sector decliner, with financials (-1.1%) also lagging.

Prices for the 10-Year Treasury gained ground, lowering yields to 0.66% from Thursday's 0.68%.

North American equity markets got off to a muted start to Friday's trade, with the S&P/TSX Composite Index, S&P 500, Dow Jones Industrial Average all essentially flat to kick off the trading session. "We've seen unprecedented support from policy makers and that's what's been driving the recent gains, and reopening of major economies".

Crude oil futures fell 2.74% at $32.99 per barrel, Brent crude dropped 2.86% at $35.03. India slashed rates for a second time this year and the European Central Bank, in the minutes from its last meeting, said it was ready to expand emergency bond purchases as early as June.

The Canadian dollar was under pressure against its American counterpart, down almost half a cent to 71.22 cents U.S.

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