Wall Street ended mixed on Friday as trade-related negotiations between the United States and Canada remained inconclusive. Both S&P 500 and Nasdaq Composite closed in the green while the Dow finished in negative territory. Lingering tariff-related conflicts between the United States and China also made investors’ shaky. However, for the month of August as a whole, all three major indexes ended up solidly in the positive territory.

The Dow Jones Industrial Average (DJI) closed at 25,964.82, declining 0.1%. However, the S&P 500 Index (INX) was up by 0.39 points to close at 2,901.52. The Nasdaq Composite Index (IXIC) closed at 8,109.54, increasing 0.3%. A total of 5.77 billion shares were traded on Friday, lower than the last 20-session average of 6.08 billion shares. Advancers outnumbered decliners on the NYSE by 1.16-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.60-to-1 ratio.  The CBOE VIX decreased 5% to close at 12.86.

How Did the Benchmarks Perform?

The Dow continued to lose for the second straight day with 16 components of the 30-stock blue-chip index closing in the red while 14 finished in the green. The tech-heavy Nasdaq Composite reversed its previous day’s losing trend supported by the strong performance of large-cap tech stocks. 

The S&P 500 gained marginally led by an increase of 0.4% in both Real Estate Select Sector SPDR (XLRE) and Consumer Discretionary Select Sector SPDR (XLY). Notably, 5 out of 11 sectors of the benchmark index closed in the green while six ended in the red.

Trade Issues Continue to Hurt Investors’ Sentiments

Bullish sentiments of market participants were dampened on Friday after the United States and Canada failed to reach a new bilateral agreement replacing the 24-year old “North American Free Trade Agreement” (NAFTA) which was formulated between the United States, Mexico and Canada.

However, the two sides agreed to continue negotiations this week as President Donald Trump stated that he is still sticking to his earlier stated time frame of late November to form a new deal with Canada replacing NAFTA. Notably, on Aug 27, Mexico and the United States have already entered into a new bilateral trade deal.

Moreover, on Aug 30, Bloomberg reported that President Donald Trump is moving ahead with fresh tariffs worth $200 billion to be imposed on a vast array of Chinese goods ranging from selfie sticks to semiconductors. The time line for submitting comments from companies and members of the public will end on Sep. 6. Trump is considering levying next round of tariffs by the end of this week.

As trade war concerns intensifies, shares of trade-sensitive companies like Caterpillar Inc. CAT and The Boeing Co. BA plummeted 0.2% and 1.2%, respectively. However, Caterpillar carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weekly Roundup

Wall Street performed strongly in the last week of August. All three major indexes – the Dow, S&P 500 and Nasdaq Composite – were up 0.7%, 0.9% and 2.1%, respectively. Both the Dow and S&P 500 posted their third straight weekly gains while Nasdaq completed its second straight weekly winning streak.

During the week, S&P 500 and Nasdaq Composite achieved new all-time highs after decisively breaking the 2,900 and 8,000 levels, respectively. The Dow also reached its psychologically important 26,000 level, but failed to maintain that mark.

U.S. stocks ended in the green in the first three trading days buoyed by strong second-quarter GDP data which was revised to 4.2% from 4.1% stated earlier and robust consumer confidence index which hit a near 18-year high. Moreover, a new bilateral deal between the United States and Mexico also boosted market sentiment.

However, during the last two days, markets ended mostly in the red following reports that the United States will impose fresh tariffs worth $200 billion on China. Inconclusive trade negotiations between the United States and Canada also dampened investor sentiment.

Monthly Roundup

The month of August turned out as a robust one for U.S. stock investors. All three major indexes posted solid gains. For the Dow and S&P 500, this year’s August was the best one since 2014. For Nasdaq Composite, gain in August 2018 was best since 2000.

The broad-market S&P 500 gained 3%, registering its third-highest monthly gain year to date. The benchmark index also completed its fifth straight monthly gain. Nasdaq Composite advanced 5.7%, marking its highest monthly gain this year after January. The tech-laden index also completed its fifth straight monthly gain.

The Dow 30 returned 2.2% in August to investors, its second straight monthly gain. Except a marginal loss in June, the blue-chip index has provided positive returns in four out of last five months.

Wall Street’s robust performance in August was buoyed by strong second-quarter 2018 earnings results and solid macro-economic data like GDP, retail sales, consumer confidence and job data. However, lingering trade related concerns – especially between the United States and China and geopolitical conflicts in Turkey and Iran continue to hurt investor’s risk appetite.  (Read More)

Will You Make a Fortune on the Shift to Electric Cars?

Here’s another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It’s not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Boeing Company (BA): Free Stock Analysis Report
 
Caterpillar Inc. (CAT): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research