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Dow snaps losing streak, averts longest slide in 40 years

CNBC logo CNBC 6/22/2018 Fred Imbert and Alexandra Gibbs

Stocks ended mixed Friday as investors tried to shake off jitters over trade tensions between the U.S. and China.

The Dow gained 119 points after closing lower in the previous eight sessions, fending off what could have been its longest losing streak dating back to 1978.

The S&P 500 gained about 0.2 percent, with energy, materials and industrials outperforming. The Nasdaq, meanwhile, closed down by 0.26 percent as tech shares slipped. 

Markets around the globe have been on a roller-coaster ride this week as tensions surrounding a tit-for-tat trade dispute between the U.S. and China continue to escalate. 

On Monday, President Donald Trump requested the United States Trade Representative identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent. Those tariffs followed levies announced by both nations last week. Consequently, Beijing stated that it would deliver its own set of counter measures, if required.

But Bloomberg News reported, citing people familiar with the matter, that some White House officials are trying to restart talks with China in order to avoid a full-blown trade war. 

Tom Essaye, founder of The Sevens Report, said in a note the report is bullish, but was "light on specifics." Essaye added: "This pullback/consolidation probably isn't over yet—although medium term, fundamentals for the markets remain supportive." 

But Trump threatened on Friday to slap a 20 percent tariff on European cars, saying in a tweet: "Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!" 

General Motors, Caterpillar and Boeing — all companies that do a lot of business outside of the U.S. — traded higher on Friday, rising at least 0.7 percent. 

Entering Friday's session, the Dow, S&P 500 and Nasdaq were all down for the week. 

Bank stocks rose slightly on Friday after the Federal Reserve determined they have enough capital to return to shareholders even after a worst-case stress test. J.P. Morgan Chase, Wells Fargo and Bank of America all ticked higher. 

OPEC ministers struck a deal regarding oil production levels in their countries sending crude prices higher. 

Producers agreed to start pumping more so that they are no longer overshooting the target they set in November 2016. Then, the group agreed to keep 1.2 million barrels per day off the market, but on Friday OPEC said they were cutting output well beyond that level. 

Ahead of the official decision, sources said the group aimed to restore about 1 million bpd to the market. However, industry sources familiar with the oil cartel's deliberations said the actual increase is likely to total around two-thirds of Saudi Arabia's target. 

That's because some OPEC members would be unable to sufficiently ramp up crude production. Analysts say supply increases are more likely to fall in a range between 600,000 to 800,000 bpd. 


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