By Wallace Witkowski and Anora Mahmudova, MarketWatch
Deere, Autodesk, Dynegy shares surge
U.S. stocks finished higher Friday for a second straight session of gains, but closed in negative territory for the week, unable to fully bounce back from sharp losses in the middle of the week sparked by White House drama.
The S&P 500 index closed up 16.01 points, or 0.7%, at 2,381.73, with all of its 11 main sectors trading higher. The industrials and energy sectors led the gains both rising more than 1%.
The Dow Jones Industrial Average finished up 141.82 points, or 0.7%, at 20,804.84. Caterpillar Inc. (CAT) and General Electric Co.(GE) led gainers, both closing up more than 2%.
Both the Dow and the S&P turned in a second week of losses as both shed 0.4% for the week.
The Nasdaq Composite Index gained 28.57 points, or 0.5%, to close at 6,083.70, powered by more than 2% gains in U.S. shares of Baidu Inc.(BIDU), Nvidia Corp.(NVDA), and Starbucks Corp.(SBUX) For the week, the Nasdaq closed down 0.6%.
Markets were rattled earlier this week, with investors succumbing to a drumbeat of negative news stories focused on President Donald Trump and his inner circle's relationship with Russia.
On Wednesday, the markets reacted to a report that Trump in February asked then-Federal Bureau of Investigation Director James Comey to stop an investigation into Russian interference into the U.S. presidential election, causing some investors to question whether Trump will finish his term. pushing stocks lower and spurring a spike in Wall Street'smost popular gauge of fear (http://www.marketwatch.com/story/wall-streets-fear-gauge-threatens-largest-daily-pop-in-8-months-2017-05-17).
However, the equity market has displayed an uncanny level of resilience over the past few days, with markets beginning a modest, but steady, rebound on Thursday after Deputy Attorney General Rod Rosenstein appointed former FBI Director Robert Mueller as special counsel (http://www.marketwatch.com/story/robert-mueller-ex-fbi-director-named-special-counsel-for-russia-probe-2017-05-17) to oversee the bureau's investigation.
On Friday, stocks flirted with recapturing much of their losses but retreated from their best levels, following a report from the New York Times that Trump referred to Comey as a "nutjob" to Russian officials, and a Washington Post article that indicated that a current White House official was a person of interest in the Russia probe (http://www.marketwatch.com/story/white-house-official-probed-over-russia-and-president-called-comey-nut-job-reports-say-2017-05-19).
Read:Why the White House should worry: Special counsels usually result in criminal charges (http://www.marketwatch.com/story/why-the-white-house-should-worry-special-counsels-usually-result-in-criminal-charges-2017-05-18)
"Clearly, appointing Mueller was brilliant," said Diane Jaffee, senior portfolio manager at TCW. "Regardless of who is in office you want the rule of law. You want that the government will prevail in maintaining checks and balances."
Jaffee said investors have been focusing on the fundamental strength of first-quarter earnings and reports of the economy, which have offered signs of steady, if not robust, growth.
Read: Fed minutes may quell fresh doubts about a June rate increase (http://www.marketwatch.com/story/fed-minutes-may-quell-fresh-doubts-about-a-june-rate-hike-2017-05-19)
Still, investors have increasingly questioned whetherPresident Trump can deliver on his economic stimulus promises amid investigations.
Opinion:Market sentiment during Watergate shows how stocks might react to Trump (http://www.marketwatch.com/story/market-sentiment-during-watergate-shows-how-stocks-might-react-to-trump-2017-05-19)
"This week political risk has caught up on the market but it's still unclear whether it has any legs," wrote Deutsche Bank strategist Jim Reid and research analyst Craig Nicol in a note to clients Friday.
Observers said investors will be closely watching potential developments on the controversy next week. Lawmakers have asked the FBI to turn over the notes Comey said he made from his meetings with Trump by next week, and a congressional hearing on the matter is due to take place, at which the former FBI head has been asked to testify.
Fed speakers: St. Louis Fed President James Bullard questioned the need for a June rate increase (http://www.marketwatch.com/story/feds-bullard-questions-need-for-june-rate-hike-2017-05-19), citing a slowdown in the U.S. economy during the first half of the year. Bullard isn't a voting member of the Fed policy committee this year.
Moving stocks: Deere shares (DE) jumped 7.3% after earnings and sales beat Wall Street forecasts (http://www.marketwatch.com/story/deeres-stock-surges-after-big-profit-and-sales-beats-raised-outlook-2017-05-19). Earnings from Campbell Soup Co.(CPB) were below expectations, sending shares down 2%.
Shares of Autodesk Inc.(ADSK) rallied nearly 15% as the company said its shift to a subscription-based software model was going well.
Dynegy Inc. shares (DYN) soared nearly 26%, and finished at a three-month high after reports that the power producer received a buyout offer from Vistra Energy(VST).
Also in the retail sector, Ross Stores Inc. (ROST) rose 1.9% after earnings and sales met forecasts (http://www.marketwatch.com/story/ross-shares-higher-after-eps-beats-expectations-sales-meet-forecast-2017-05-18).
Shares of Foot Locker Inc.(FL) slid nearly 17% after weaker-than-expected first-quarter results.
Shares of Under Armour Inc.(UAA) snapped a seven-session losing streak, closing up 1.1%
McKesson Corp.(MCK) shares rallied 8.2% after the health-care supply chain management company topped earnings expectation (http://www.marketwatch.com/story/mckesson-shares-surge-after-earnings-outlook-top-street-view-2017-05-18) late Thursday.
Read:Only two S&P 500 companies passed this sales-and-earnings test (http://www.marketwatch.com/story/only-two-sp-500-companies-passed-this-sales-and-earnings-test-2017-05-11)
Shares of Applied Materials Inc.(AMAT) rose 0.4% after the microchip-materials maker's results and outlook topped Wall Street estimates late Thursday (http://www.marketwatch.com/story/applied-materials-shares-rise-on-earnings-beat-strong-outlook-2017-05-18).
Read:Bill Ackman has 'something to prove' after Valeant mistake (http://www.marketwatch.com/story/bill-ackman-has-something-to-prove-after-valeant-mistake-2017-05-18)
(http://www.marketwatch.com/story/bill-ackman-has-something-to-prove-after-valeant-mistake-2017-05-18)Other markets: European stocks end higher across the board (http://www.marketwatch.com/story/european-stocks-start-digging-out-of-trump-inspired-rout-2017-05-19), and the FTSE 100 index (http://www.marketwatch.com/story/uk-stocks-break-2-day-losing-streak-after-pounds-mini-flash-crash-2017-05-19)snapped a two-day losing streak. In Asia , stocks finished mostly in the green.
The U.S. Dollar Index was flat, and the British pound recaptured the $1.30 level (http://www.marketwatch.com/story/the-pound-looks-set-for-significant-further-upside-now-that-its-regained-130-2017-05-18) it lost late Thursday after a mini "flash crash" that sent it to as low as $1.2888 within seconds.Read:The pound looks set for 'significant further upside' now that it's regained $1.30 (http://www.marketwatch.com/story/the-pound-looks-set-for-significant-further-upside-now-that-its-regained-130-2017-05-18)
Gold prices (http://www.marketwatch.com/story/gold-futures-hit-pause-as-stocks-improve-but-weekly-advance-on-track-2017-05-19) settled up less than 0.1% at $1,253.60 an ounce, while oil prices added to gains, with West Texas Intermediate crude prices settling above the $50-a-barrel mark for the first time in a month (http://www.marketwatch.com/story/optimism-ahead-of-opec-meeting-drives-further-gains-for-oil-2017-05-19).
--Barbara Kollmeyer in Madrid contributed to this article.
(END) Dow Jones Newswires
May 19, 2017 16:55 ET (20:55 GMT)
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