The US markets ended higher on Friday as investors looked ahead to a key meeting between President Donald Trump and Chinese President Xi Jinping. The Chinese Ministry of Commerce has called on Washington to cancel its import tariffs and sanctions measures on Huawei and other Chinese companies, while Trump has reiterated a threat to impose tariffs on the remaining $300 billion of Chinese imports if talks fail. Gains in banking stocks also supported the markets after the Federal Reserve cleared the way for better-than-expected payouts. Positive economic data added more optimism among investors. The Commerce Department data showed that personal income increased by more than expected in the month of May. Personal income climbed by 0.5 percent in May, matching the advance seen in April. Street had expected income to rise by 0.3 percent. The report also said personal spending rose by 0.4 percent in May following an upwardly revised 0.6 percent increase in April. The spending growth matched economist estimates.
Meanwhile, separate report from MNI Indicators unexpectedly showed a contraction in Chicago-area business activity in the month of June. MNI Indicators said its Chicago business barometer tumbled to 49.7 in June after rising to 54.2 in May, with a reading below 50 indicating a contraction in regional business activity. Investors had expected the index to edge down to 53.1. With the much steeper than expected decline, the Chicago businesses barometer dropped below 50 for the first time since January of 2017.
Dow Jones Industrial Average rose 73.38 points or 0.28 percent to 26599.96, Nasdaq gained 38.49 points or 0.48 percent to 8006.24 and S&P 500 was up by 16.84 points or 0.58 percent to 2941.76.
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