The stock market closed mainly higher Friday despite a late dip that came after the U.S. announced measures against some Chinese companies.
XThe U.S. Commerce Dept. said it will impose new restrictions on U.S. technology on China's Ministry of Public Security's Institute of Forensic Science and eight Chinese companies. The nine parties are "complicit in human rights violations and abuses committed in China's campaign of repression, mass arbitrary detention, forced labor and high-technology surveillance" against Muslim minorities in the Xinjiang Uighur Autonomous Region, the Commerce Dept. statement said.
The restrictions are the latest in a series of moves that have raised tensions between the U.S. and China. Chinese stocks were already broadly lower Friday after China set new security limits on Hong Kong that limit the region's autonomous rule.
The Hang Seng Index plummeted 5.6% overnight. The iShares MSCI China ETF (MCHI) slid 3.7%, falling below its 200-day moving average. IShares China Large-Cap ETF (FXI) tumbled 2.8% and closed below its 50-day average.
After a late-afternoon dip, U.S. stocks bounced and closed almost at session highs. In U.S. stock indexes, the Nasdaq composite led with a 0.4% increase, cementing a gain of more than 3% for the week. The S&P 500 rose 0.2% and the Dow Jones Industrial Average lost only a fraction after paring losses.
Volume fell on the NYSE and rose on the Nasdaq from Thursday's totals, according to unconfirmed data.
IBD 50 Outperforms Stock Market
The small-cap Russell 2000 rose 0.4% at the closing bell. Innovator IBD 50 ETF (FFTY) outperformed the broad market, clocking in a 0.6% increase Friday.
There were few big moves in the IBD 50, but Silicon Motion (SIMO) fell back below the 47.45 buy point of a cup with handle in big volume. There's no sell signal, but the breakout is threatened.
On a day lacking many buy signals, a couple of cloud-computing stocks rose past buy points.
Splunk (SPLK) soared to a new high despite a mixed quarterly report. Shares gapped up past a 176.41 buy point of a cup without handle. Shares closed extended from the buy area.
A handle provided an earlier buy point at 161.90. But buying on that move would have exposed investors to the risk of a sell-off because the earnings report was so close. The relative strength line is surging higher, a good sign for the breakout.
Workday (WDAY) briefly edged above the 168.85 buy point of a cup-with-handle base. Volume was lackluster, just like the price action, leaving the breakout clouded.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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