U.S. stock indexes turned mixed Friday afternon, as tariff-related fears lingered but President Trump backed off a threat to veto a spending bill. Meanwhile, Cisco Systems (CSCO) found support at its 50-day line while Apple (AAPL) headed toward its eighth loss in nine sessions.
The Nasdaq dropped 0.5%, while the S&P 500 lost 0.2%. The Dow Jones industrial average rose 0.2%. The small cap Russell 2000 shaved off 0.3%.
Cisco stopped short of its 50-day line amid Thursday’s harsh sell-off and rose moderately midday Friday.
Cisco’s relative strength line is at a 52-week high. The RS line measures a stock’s performance vs. the S&P 500.
Analysts expect Cisco to grow earnings 8% in fiscal 2018 ending in July. That would be the best pop in five years.
On the negative side, Apple struggled to a small gain Friday but remained below its 50-day line.
Apple’s RS line hit a high in November but has been sagging since then.
The Street expects Apple to grow earnings 25% in fiscal 2018 ending in September. A 25% increase would be Apple’s best annual performance in three years.
So far this year, Cisco has outperformed Apple. Cisco stock is up 12.5% vs. a 1% drop for Apple. The 12.5% year-to-date gain for Cisco is the best in the 30-component Dow Jones industrial average.
The stock market has had plenty of uncertainty to deal with this month.
In early March Trump slapped tariffs on steel and aluminum imports, though exempting Canada and Mexico. On Thursday, Trump tagged China for more tariffs. Friday the president tweeted a threat to veto the congressional spending bill but later reversed his stance and signed the bill.
Without passage, a government shutdown would’ve begun Saturday.
The tariffs probably constitute the biggest threat to the economy and the stock market. Tariffs are seldom a one-and-done deal. Other countries can respond with their own tariffs, creating a cycle of continued uncertainty.
Durable goods orders for February delivered a welcome surprise, rising 3.1% month to month vs. views for 1.7%. Year over year, new orders jumped 8.9%.
New home sales in February struck 618,000, just under the consensus estimate of 620,000. The homebuilder stock group initially rose 2.% but then reversed to a 0.5% gain.
Breakouts Hard To Find
Breakouts were scarce Friday. Industrial supplier DXP Enterprises (DXPE) rose 2% in heavy volume, two days after reporting earnings that stomped estimates. Quarterly earnings rolled in at 36 cents a share vs. views for 7 cents, according to William O’Neil + Co.
DXP is thinly traded, turning about 135,000 shares daily.
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