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U.S. stocks ended mostly lower Friday as a plunge in crude-oil futures, sparked by reports that OPEC and major oil-producer Russia were considering increasing output, slammed shares of energy-related companies. The three main benchmarks, however, managed to produce a weekly gain, led by outperformance in the internet and technology sector.
Markets will be closed on Monday in observance of Memorial Day and total composite trading volume on Friday — the third lowest of 2018 at 5.7 billion shares changing hands — reflected investors leaving early ahead of the holiday.
What did markets do?
The Dow Jones Industrial Average retreated by 58.67 points, or 0.2%, to 24,753.09. The S&P 500 closed down 6.43 points, or 0.2%, at 2,721.33. The Nasdaq Composite Index meanwhile, added 9.42 points, or 0.1%, to finish the week at 7,433.85.
For the week, the Dow gained 0.2%, the S&P 500 logged a 0.3% advance, while the Nasdaq closed out the trading period with 1.1% return.
What’s drove the markets?
Crude-oil futures tumbled 4% following the reports that the Organization of the Petroleum Exporting Countries and other major producers may lift production by as many as 1 million barrels a day. Crude prices are up more than 12% thus far this year, which has lifted the energy sector. The industry is up more than 9% since the start of April, supported in large part by the rally in commodity prices. The Energy Select Sector SPDR ETF fell 2.6% on Friday. For the week, the fund lost 4.5%.
Investors also kept an eye on geopolitical headlines. After President Donald Trump called off a June 12 summit with North Korea, a senior official from Pyongyang said its leader Kim Jong Un is still willing to meet. U.S. stocks briefly tumbled Thursday on news that Trump had pulled out of talks, but traders seemed to be finding some reassurance in North Korea’s measured response.
“We express our willingness to sit down face-to-face with the U.S. and resolve issues anytime and in any format,” said Kim Kye Gwan, a senior North Korea foreign ministry official, in a statement published by the North’s official state media. She was the same official who had harsher words for the U.S. administration a week ago.
What are market analysts saying?
“If the Saudis do lift oil production, that could be the news of the day. It may result in a weak patch for the energy sector, but for the broader market that could be offset by a rise in sentiment if it results in gas prices falling going into the summer driving season,” said John Augustine, chief investment officer at Huntington Private Bank.
“There’s still a lot of questions about geopolitical issues with North Korea. Recent developments have seemed positive, but there’s a big question of what the sentiment is going to look like during the long weekend,” he said. “The question for investors is whether they should wait until Tuesday to see what happened over the weekend and make decisions then.”
What’s on the economic docket?
Durable-goods orders fell 1.7% April, but the decline was almost entirely due to a decline in contracts for Boeing planes. Most businesses took in more orders and increased investment last month.
Separately, a read on consumer sentiment came in at 98 in May, down from April’s reading of 98.8.
Federal Reserve Chairman Jerome Powell on Friday said central bank independence doesn’t just mean having the ability to determine interest rates without political interference, but set regulations as well. The central-bank chairman remarks came during a celebration of the 350th anniversary of Sweden’s Riksbank.
Which stocks are in focus?
Energy stocks were among the most active of the day. Exxon Mobil Corp. fell 1.9% while Chevron Corp. was down 3.5%. Both stocks are Dow components, which exacted a roughly 40-point toll from the price-weighted blue-chip gauge.
Foot Locker Inc . soared nearly 20.2% after profit and sales for the sportswear maker beat forecasts.
Zoe’s Kitchen Inc. shares plunged 40% after the restaurant chain posted a bigger-than-expected first-quarter loss.
Shares of Gap Inc. fell by about 15% after the retailer missed earnings expectations and reported weaker same-store sales late Thursday.
What are other markets doing?
After a cautious session, Asian stocks finished in the red for the week, led by a 2% drop for the Nikkei 225 index European stocks ended the session mostly higher, outside of Spain, where stocks were under pressure on political worries.
The ICE U.S. Dollar Index moved up 0.5% to 94.197. The 10-year Treasury note yield ended Friday’s abbreviated session for bonds at 2.931%, off 13.6 basis points for the week.
Gold futures settled slightly lower at $1,303.70 an ounce.
—Barbara Kollmeyer contributed to this article