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US stocks sprint to record high finish line

Last updated: 17:00 17 Feb 2017 EST, First published: 03:58 17 Feb 2017 EST

US stocks lower while soup makers are biggest risers and fallers

US stocks, beleaguered all session, managed to close Friday at a fresh record high, led by financials as well as takeover bidder Kraft Heinz (NASDAQ:KHC).

The S&P 500 market bellwether, which spent the entire session below water managed in the last 30 minutes to race to close at a fresh intraday high of 2,351.16, up 0.2% on the day and 130 points higher than where it began the week.

The S&P 500 clocked its biggest weekly gain in six weeks as the US benchmark index finished Friday with a fresh closing record.

With financials in the vanguard of the gains, it was no surprise that the Dow Jones Industrial Average also mustered a record high finish. It too spent the entire session lower but in the last 15 minutes of trading it managed to pip a fresh intraday and closing high of 20,624.05, up 0.02%. Bank stocks in the Dow such as Goldman Sachs (NYSE:GS) contributed to the gains, although that investment bank ended up 0.4% at $250.38, just shy of its record highs struck on Wednesday.

The tech-heavy Nasdaq Composite similarly had a fairly lacklustre session and in the last 15 minutes raced higher to end up 0.4% at a fresh intraday record high level of 5,838.58.

US stocks continued to push deeper into record territory this week, riding a wave of investor optimism on the US economy, stronger corporate profits, reduced regulation, and the Trump trade. Indeed, the value of stocks listed on the S&P 500 topped $20tn for the first time on Monday

It wasn’t so much that stocks ignored the hawkish tone of Fed chair Janet Yellen’s testimony to Congress this week, selecting to hear only the brighter prognosis for the US economy, but rather that financials who stand to benefit from a rise in historically low-interest rates were in the driving seat of the bourse.

The top gainer on the S&P 500 was foods giant Kraft Heinz which ended up 10.7% at $96.65 as it vowed to have another attempt at bidding for global rival Anglo-Dutch Unilever (NYSE:UL). Unilever ADRs ended up 14% at $48.53.

The S&P Midcap 400 closed up 0.1% at 1734 and led by electronic test equipment maker Cognex (NASDAQ:CGNX), up 8.5% to $76.44.

But the S&P Smallcap 600 closed down 0.2% at 855 and led by Circor International (NYSE:CIR) down 14.3% to $61.55.


Early trading

US stocks opened lower on Friday as investors paused for breath following multi-session record highs that ended mid-week, with the S&P 500 framed by soup companies as top gainers and losers.

A food giants’ takeover struggle failed to cut the mustard with investors, apart from those invested in the brands themselves.

“We’re blessed with a whirlwind of exciting M&A news at the moment. At the risk of being a party pooper, however, I have reservations about the latest between Kraft-Heinz and Unilever,” said Mike van Dulken, Head of Research at Accendo Markets.

Meanwhile, investors are hoping for Trump Administration promises to turn into policies before taking the market any higher.

The S&P 500 was down 0.2% at 2340 and led by Campbell Coup Co (NYSE:CPB) down 5.9% at $58.89 on poor quarterly sales while the top gainer was Kraft Heinz (NASDAQ:KHC) up 8.3% to $94.48 after setting alight the food industry with a so far rejected bid for Unilever (NYSE:UL).

Unilever shares were up 9.1% at $46.44 in New York.

Neil Shan, director of research at Edison Investment Research, implied that Kraft, while trying to be opportune, was perhaps seven months too late to put in a bid for Unilever.

“An approach for Unilever is a sure sign of the surge in dollar buying power and the decline in Sterling. Today's 10% rise in Unilever's share price means this is cash neutral for a US purchaser compared with if it had approached seven months ago,” he said.

The S&P Midcap 400 was down 0.2% at 1729 and led by Aaron's Inc (NYSE:AAN) down 8.5% to $27.00. Consumer electronics retailer Aaron's is due to issue its quarterly earnings report in the upcoming extended-hours session. Given its history, traders can expect light trading in the issue immediately following its quarterly earnings announcement. Historical earnings event related premarket and after-hours trading activity in AAN indicates that the price change in the extended hours is likely to be of limited value in forecasting additional price movement by the following regular session close, according to a note on Nasdaq.com

The S&P Smallcap 600 was down 0.4% at 853 and led by metal maker Circor International (NYSE:CIR), down 12.5% at $62.86 after KeyBanc downgraded Circor from Overweight to Sector Weight.


Pre-Open

US stocks are set to open lower on Friday as the ascent of multi-day records until mid-week becomes elusive even as a major transatlantic takeover battle looks likely dominating market talk.

The push higher has been attributed to President Trump's plans to boost business, cut taxes and deregulate various sectors of the economy.

But, in the absence of more substance about pro-business policies, investors are now pausing to catch their breath.

The S&P 500 and Dow Jones Industrial Average are seen down 0.3% and the Nasdaq Composite down 0.2%.

Wells Fargo (NYSE:WFC), whose shares marked a record high on Wednesday, will give investors a peek into its efforts to rebound from its fake account scandal when it releases monthly customer account numbers and holds a conference call on Friday.

The bank has reported a dramatic decline in consumer checking account openings in recent months. It's now looking to shut more than 400 branches.

Wells Fargo shares were down 0.9% at $57.58 pre-market and weighing on market tickers.

On the upside, Deere & Co (NYSE:DE) shares climbed on Friday after the world’s biggest maker of agricultural equipment boosted its outlook for profits and sales in its current fiscal year.

The Illinois-based company said it expects to generate net income in 2017 of $1.5bn, up by $100mln from a previous estimate. Meanwhile, sales are now forecast to rise 4% year-on-year, from a prior outlook of a fall of 1%.

Deere’s more upbeat expectations come as the company cuts costs amid a downturn in the US agricultural market.

Deere shares were up 3.3% at $112.75 pre-market.

Shares in Anglo-Dutch consumer goods behemoth Unilever (NYSE:UL) hit their highest European levels since records began in 1983 on Friday after Kraft Heinz (NASDAQ:KHC) confirmed that it had made a £112bn bid.

The bid has been rejected but Kraft Heinz said it looked “forward to working to reach agreement on the terms of a transaction”.

Unilever shares UDRs on Wall Street were up a similar 10.8% as in Europe, to $47.20 and Kraft Heinz up 4.8% at $91.50.

Other foods groups had their own problems. Campbell Soup Company (NYSE:CPB) shares were 1.4% lower at $61.65 pre-market on Friday after the company reported second-quarter sales that missed expectations.

Earnings for the latest quarter fell to $205mln, or 33 cents per share, from $414mln, or 85 cents per share in the year-earlier period. Revenue fell to $2.17bn from $2.20bn.

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