U.S. Stocks Set to Post Strong First-Half Gains

By Riva Gold and Corrie Driebusch Features Dow Jones Newswires

U.S. stocks rose Friday, on track to post large gains in the first half of 2017.

Continue Reading Below

Technology companies, which have come under pressure in recent weeks, ticked higher. The sector sank this week, however tech stocks remain some of the best performers so far this year, propelling the tech-heavy Nasdaq Composite to its best start to a year since 2009.

On Friday, the Nasdaq Composite added 0.2%, set to end the first half of the year up more than 14%. The Dow Jones Industrial Average rose 69 points, or 0.3%, to 21356, while the S&P 500 climbed 0.3%; both indexes are on pace to finish the first six months of 2017 up more than 8%.

As stocks around the world have spent most of the year climbing, government bond yields have remained ultralow. However, those trends had reversed for most of this week amid pressure on the tech sector and worries that global central banks may be tightening policy faster than previously expected in response to strengthening economies.

Tech companies in the S&P 500 are set to end the week down 2.6%, even as they ticked slightly higher Friday.

Among the disappointing performers this week is Blue Apron Holdings, a meal-kit delivery tech startup that made its stock-market debut Thursday. The company closed at its IPO price of $10 a share on Thursday following a disappointing roadshow, and on Friday the stock fell 3.1%.

Continue Reading Below

On Friday, yields on the 10-year Treasury note rose to 2.274% from 2.270%. Yields move inversely to prices.

Yields inched a touch higher after data showed the Federal Reserve's preferred inflation gauge, the price index for personal-consumption expenditures, fell 0.1% in May from the prior month while personal-consumption expenditures increased a seasonally adjusted 0.1% in May from the prior month, the Commerce Department said.

Government bond yields in Europe rose this week as central bank officials signaled they may be moving closer to withdrawing monetary stimulus. On Friday, yields on 10-year German government bonds edged up to around 0.457% from 0.451% on Thursday. Earlier this week, comments from European Central Bank President Mario Draghi had sent government bond yields and the euro sharply higher amid expectations that a pickup in the region's economy might prompt it to tighten policy.

The Stoxx Europe 600 rose 0.2% on Friday, brushing off widespread declines across Asian markets.

"We think Europe is finally on track," said Andy Flynn, fund manager at William Blair. Eurozone businesses and consumers were more optimistic in June than at any time since before the global financial crisis, data showed this week.

Earlier, the global bond selloff had spread to Asia, pushing the yield on Japan's 10-year government bond to its highest in more than three months.

In Japan, the Nikkei 225 fell below 20000 for the first time in two weeks before recovering to end down 0.9%. South Korea's Kospi edged down 0.2%, hit by a drop in index behemoth Samsung, while Australia's S&P/ASX 200 slid 1.7% as major bank shares fell.

Friday's stock weakness there might be the result of companies' "squaring up their books," on the last working day of the financial year for a large number of Australian companies, said Grant Williamson, a director at Hamilton Hindin Greene in New Zealand.

In currencies, the WSJ Dollar Index was flat following its lowest close since November.

--Lucy Craymer contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

U.S. stocks rose Friday, with major indexes set to post strong gains in the first half of 2017.

Technology companies, which have come under pressure in recent weeks, ticked higher. Tech stocks have been some of the best performers so far this year, propelling the Nasdaq Composite toward its best start to a year since 2009.

"When you look at tech, these are companies with the least baggage. If you look at some of the top performers, Apple, Facebook or Amazon, these are areas where people see growth or opportunity," said Tom Digenan, head of U.S. equities at UBS Global Asset Management.

The Nasdaq Composite added 0.2% Friday, set to end the first half of the year up more than 14%. The Dow Jones Industrial Average rose 97 points, or 0.5%, to 21384, while the S&P 500 climbed 0.4%. Both indexes are on pace to finish the first six months of 2017 up more than 8%.

As stocks around the world have spent most of the year climbing, government-bond yields have remained ultralow. However, those trends had reversed for most of this week amid pressure on the tech sector and worries that global central banks may be tightening policy faster than previously expected in response to strengthening economies.

Tech companies in the S&P 500 are on pace to end the week down 2.6%.

Among the disappointing performers this week: Blue Apron Holdings, a meal-kit-delivery tech startup that made its stock-market debut Thursday. The company closed at its IPO price of $10 a share on Thursday following a disappointing roadshow, and on Friday the stock fell 3.9% to $9.61.

The rise in stock prices in the first half of the year were buoyed by strong corporate earnings and the expectation that economic growth is picking up. However, some economic readings have come in softer than expected, even as consumer confidence has soared, causing some investors to question the longevity of the stock-market's gains.

"The market's crafting a lot of excuses for why it's up the way that it is," said Michael Farr, president of the money management firm Farr, Miller & Washington, adding that the thing that worries him most about the stock-market's half-yearly gains is the lack of concern among clients.

On Friday, data showed the Federal Reserve's preferred inflation gauge, the price index for personal-consumption expenditures, fell to the lowest level in six months.

U.S. government bond yields continued to rise after the reading, with the yield on the 10-year Treasury note climbing to 2.282%, according to Tradeweb, from 2.270%. Still, the rise was modest compared with earlier in the week, when bond yields around the world jumped as central bank officials signaled they could be moving closer to withdrawing monetary stimulus.

The Stoxx Europe 600 fell 0.3% on Friday, adding to its monthly losses. However, in the first six months of the year European stocks have fared well, with the Stoxx Europe 600 gaining 5%.

Earlier, the global bond selloff had spread to Asia, pushing the yield on Japan's 10-year government bond to its highest in more than three months.

Japan's Nikkei Stock Average fell below 20000 for the first time in two weeks before recovering to end down 0.9%. Despite recent losses, the Nikkei ended the first half of the year up 4.8%.

In currencies, the WSJ Dollar Index was recently up 0.1% following its lowest close since November.

--Lucy Craymer contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

June 30, 2017 14:57 ET (18:57 GMT)