Stocks opened to thin early Friday, as global markets rose and investors monitored the impact of Hurricane Florence as it plowed into the North Carolina coast.
Advanced Micro Devices (AMD) led an early rally among chip stocks, while Tilray (TLRY) spearheaded a sell 0ff in the budding marijuana trade. China IPO Nio (NIO) neared triple-digit gains above its initial offering price. Shire (SHPG) jumped after China regulators cleared its acquisiton by Japan’s Takeda. Utility NiSource (NI) dived following Thursday gas explosions in Massachusetts.
The Dow Jones industrial average, S&P 500 and Nasdaq Composite all opened to gains of 0.1%.
Boeing (BA) led the Dow, up 0.9%. Drugmaker Shire topped the Nasdaq 100, while AMD headed the S&P 500, and NiSource tumbled to that index’s deepest decline.
The Dow opens Friday toting a 0.9% gain for the week, while the S&P 500 is up 1.1%. Both vie for their ninth gain in the past 11 weeks. The Nasdaq Composite rose 1.4% through Thursday, as it continues to ride support at its 10-week moving average.
Hurricane Florence Update
In North Carolina, the threat of wind damage slipped down the list of concerns as Hurricane Florence weakened to a Category 1 storm before making landfall Friday. But the storm still packed 90 mph winds, reportedly knocking out power to more than 400,000 residents, and storm surge and rains remained critical threats. The huge storm was expected to dump up to 40 inches of rain on portions of North Carolina on Friday. More than one million residents evacuated while others sheltered in place to ride out the storm.
August Import Prices Drop, Consumer Sentiment Surges
Import prices posted their largest decline in 18 months in August, the Labor Department reported, as a strong dollar held back inflation pressures. Import prices fell 0.6% for the month, but climbed 3.7% year-over-year. Analyst forecasts called for a 0.1% monthly slip. Export prices were down 0.1%, below expectations for a 0.2% increase for the month, although still up 3.6% on the year.
Retail sales inched up 0.1% in August, according to the Commerce Department, below forecasts for a 0.4% gain. Minus auto and gasoline, sales were up 0.2%, below projections for a 0.4% advance.
Industrial production rose 0.4% in August, the Federal Reserve said, in line with estimates. Utilization of manufacturing capacity held steady at 78.1%, below views for an uptick to 78.3%.
Consumer sentiment jumped to a six-month high in September, according to preliminary estimates from the University of Michigan. The university’s Consumer Sentiment Index rose to 100.8, up from 96.2 in August and well above forecasts for a reading of 98. 56% of households surveyed reported financial gains, just below the 57% record set in March.
Crude oil prices rose 0.3% as West Texas Intermediate continued to trade just below the $69 per barrel mark. That is almost precisely at the midway point between the highs set in 2013 and the price-crash low of February 2016. The weekly U.S. rig count is slated for release from Baker Hughes (BHGE) at 1 p.m. ET.
AMD Leads Chip Stocks, Nio Aims Higher: NiSource Dives
Advanced Micro Devices once again steered higher in premarket trade, up 3.4% as the stock aims for its sixth straight weekly advance. AMD stock is up 94% after clearing a 15.75 buy point in mid-June.
Dave & Buster’s Entertainment (PLAY) jumped 2.8% as the sports bar-and-arcade chain topped second-quarter views. The gain sent shares above a 58.96 buy point in a cup-with-handle base.
Adobe Systems (ADBE) leapt 2.5% after delivering positive fiscal third-quarter results late Thursday. Adobe shares ended Thursday in a buy range above a 263.93 flat base buy point.
China IPO Nio spiked 10%, opening almost 100% above Wednesday’s IPO price. The maker of luxury electric vehicles, touted as China’s Tesla (TSLA), soared 72% on Thursday. The stock has not yet formed an IPO base or offered a valid buy point. Tesla shares slipped 0.2% in early action.
Ireland-based drugmaker Shire climbed more than 2% after Chinese regulators cleared the company’s takeover by Japan-based pharmaceutical heavyweight Takeda. The $62 billion deal, reportedly the largest undertaken by a Japanese company, is expected to close in the first half of 2019.
Diversified utility NiSource skidded almost 10% lower following a series of reportedly gas-related explosions in dozens of homes in Merrimack Valley, Mass. Customers of the company’s Columbia Gas of Massachusetts were evacuated as crews worked to shut off individual gas valves for each of 8,600 customers in the area. NiSource shares had climbed 22% since June and were taking out new highs.
Marijuan IPO Tilray narrowed its loss to 5.2% after diving 18% in opening trade. News outlet Politico reported late Wednesday that Canadian workers and investors involved in the marijuana industry could be prevented entry into the U.S. Peers Cronos (CRON) and Canopy Growth (CGC) traded down about 2% each.
Trade War Hopes Boost Hong Kong, Tokyo, Europe
Stocks rallied in Hong Kong and Tokyo Friday, while China’s mainland markets slipped after a round of weak economic data for August. Hong Kong’s Hang Seng Index jumped 1% as casino and technology issues continued to rebound, hauling the index out of bear market terrain and to a 1.2% advance for the week. Mainland markets were less fortunate, with the Shanghai Composite slipping 0.2% Friday to chalk up a 0.7% loss in its third straight weekly decline. Shanghai has been in bear market territory since late June.
In Japan, Tokyo’s Nikkei 225 popped 1.2% as stocks rallied for the fourth day this week. That left the benchmark up 3.5% for the week, its best week since mid-July, but still 4% below January’s high.
European markets were also tracking toward their best week since July as trade talk optimism again lifted automakers and mining stocks. Frankfurt’s DAX and the CAC-40 in Paris each gained 0.5%, London’s FTSE 100 was ahead 0.3% in afternoon trade.
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