- The Dow Jones Industrial Average ended down Friday, but held onto most of the week’s gains following reports that President Donald Trump ordered, but then rescinded, an airstrike on military installations in Iran.
- Shares of Canopy Growth (CGC – Get Report) tumbled after the company posted a wider loss on better-than expected revenue. Canopy Growth is Real Money’s Stock of the Day.
- Shares of UnitedHealth Group (UNH – Get Report) advanced following a report in The Wall Street Journal that the company was ready to buy healthcare payments group Equian LLC for around $3.2 billion.
Wall Street Overview
Stocks finished down Friday, but held onto most of the week’s gains following reports that President Donald Trump rescinded a planned airstrike on military installations in Iran and after the Commerce Department banned five more Chinese entities from buying U.S. electronics components.
The Dow Jones Industrial Average, which at one point traded above its Oct. 3 record close, ended down 34 points, or 0.13%, to 26,719.
The S&P 500, one day after posting a record closing high, briefly hit an intraday record, before finishing down 0.13%.
The Nasdaq dipped 0.24% after chip stocks, such as Advanced Micro Devices (AMD – Get Report) and Nvidia (NVDA – Get Report) , fell following a U.S. Commerce Department move banning five more Chinese entities from buying U.S. components after blacklisting telecom giant Huawei last month.
Trump said on Twitter Friday that he was in “no hurry” to strike Iran.
The planned strike, which was reported by The New York Times, was meant to take place early Friday in response to the downing of a U.S. drone patrolling the Strait of Hormuz.
“We were cocked & loaded to retaliate last night on 3 different sights [sic] when I asked, how many will die,” Trump said on Twitter. “150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it.”
The Federal Aviation Administration said it has barred U.S.-registered aircraft from operating over parts of the Persian Gulf and the Gulf of Oman due to heightened tensions and military activity in the area.
“I think it’s good that President Trump sent a strong enough message by getting ready to strike and calling it off,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “I think he did the right thing because if you attack Iran at this point, they’re going to win a lot of support. Right now, Iran is actually losing support-even their closest allies are saying, ‘hey, what the heck are you doing?'”
Flynn added that the threat to the world’s energy supply cannot be underestimated. “Hopefully, we’re pulling back from the brink,” he said.
Brent crude contracts for August delivery, the global benchmark, were up 86 cents to $65.31 a barrel, while West Texas Intermediate crude contracts for the same month, which are more tightly linked to U.S. gas prices, were up 53 cents a $57.60 a barrel.
In addition, gas future rose following an explosion and fire at the Philadelphia Energy Solutions Refining Complex early Friday morning.
Meanwhile, Vice President Mike Pence will postpone his planned speech on China policy next week in order to avoid ratcheting up tensions ahead of Trump’s planned meeting with China’s President Xi Jinping later next week, according to The Wall Street Journal.
“Traders in the U.S. are taking a breather from the major upward move of the week, and now all eyes will be on the Trump-Xi Jinping meeting at the G-20 summit week,” said David Madden, a market analyst at CMC Markets UK. “The latest comments we heard in relation to US-China trade were optimistic, but dealers are mindful the situation is still on going, so we might see some long positions being pared back ahead of the meeting of leaders.”
Madden said the latest PMI manufacturing and services reports were “underwhelming.”
“The manufacturing update was 50.1 – its lowest reading in over nine years, and the services reading was 50.7, its lowest in over three years,” he said. “The updates both showed minimal growth, and it adds weight to the argument that the Fed should cuts rates later this year.”
Canopy Growth (CGC – Get Report) shares fell 8% to $40.20 after the company posted better-than expected revenue for its fiscal fourth quarter but cautioned that its recently approved deal to acquire rights for U.S. based Acreage Holdings (ACRGF) will lead to a charge that will have “a materially negative impact on net income in the first quarter of fiscal 2020.” Canopy Growth is Real Money’s Stock of the Day.
Shares of UnitedHealth Group (UNH – Get Report) rose 1.8% to $252.33 following a report in The Wall Street Journal that the company is ready to buy healthcare payments group Equian LLC for around $3.2 billion.
Slack Technologies (WORK) shares fell 4.5% to $36.90 following a direct listing on the New York Stock Exchange yesterday that valued the business-focused software group at $23 billion.
In economic news, existing home sales increased 2.5% to a seasonally adjusted annual rate of 5.34 million units last month, the National Association of Realtors said. April’s sales pace was revised slightly higher to 5.21 million. Economists had expected existing home sales rising to a rate of 5.25 million units in May.