MARKET SNAPSHOT: Stock Market Edges Lower As Traders Await French Election

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04/21/2017 | 02:06 pm

By Sara Sjolin and Anora Mahmudova, MarketWatch

Main indexes on track for weekly gains

U.S. stocks traded flat to slightly lower on Friday as investors appeared reluctant to make big bets ahead of the first round of France's closely watched presidential election this weekend.

The main indexes were on track to book weekly gains, however.

The S&P 500 index was down 2 points, or 0.1%, at 2,3535. Telecoms and energy shares were leading losses, down 0.7%.

The Dow Jones Industrial Average was off 11 points, or 0.1%, at 20,567. The Nasdaq Composite Index retreated from its record close level, off 6 points, or 0.1%, at 5,910.

Lack of progress in passing and implementing tax reforms have put a damper on the monthslong rally that followed the presidential elections in November.

But markets continue to react to comments on policy changes by the Trump administration cabinet members, such as Treasury Secretary Steven Mnuchin and White House chief economic adviser Gary Cohn.

Mnuchin on Thursday said that President Donald Trump's tax overhaul will be unveiled in the near future, bolstering sentiment.

"A move by Trump to challenge steel imports and positive tax reform rhetoric from Treasury Secretary Mnuchin revived hopes for the fabled Trump 'reflation trade,'" said analysts at Accendo Markets, in a note.

"Markets have also taken in their stride another terror attack in the French capital just days before Sunday's first round of the Presidential election," they added.

Late Thursday, a gunman opened fire on the Champs-Élysées boulevard in Paris, killing a police officer and wounding two others. European stocks were mixed, with France's CAC 40 index down 0.2%.

The euro was trading at $1.0699, down from $1.0718 late Thursday in New York.

The attack could give a late-campaign surge in support for anti-immigration, far-right candidate Marine Le Pen in the tight presidential race, analysts said. Le Pen has vowed to hold a referendum on France's membership of the European Union, fueling fears of a breakup of the bloc. One of her three key rivals, far-left euroskeptic Jean Luc Melenchon, has also pledged to renegotiate EU treaties and hold a referendum.

"A Le Pen (far right) & Mélenchon (far left) result would surely raise alarms. Markets look to be pricing in something between the two with [centrist candidate Emmanuel] Macron and Le Pen progressing to the second round in [two weeks] time, although the last year of global political events has taught us to expect the unexpected," the Accendo analysts said.

Economic news: Wrapping up the data calendar for the week, the Markit flash purchasing managers index for April dropped to 52.7 from 53.2.

In Federal Reserve news, Minneapolis Fed President Neel Kashkari was set to moderate a panel discussion Friday morning.

Fed Vice Chairman Stanley Fischer will give an interview on CNBC between 11 a.m. and 11:30 a.m. Eastern.

Earnings season: The results season continued at full speed on Friday with General Electric Co.(>> General Electric Company) reporting earnings ahead of expectations . But shares dipped 0.3%.

Honeywell International Inc.(>> Honeywell International Inc.) also beat forecasts , sending the shares up 3%.

Schlumberger Ltd.(>> Schlumberger Limited.), on the other hand, fell 2.6%, after revenue missed Wall Street estimates .

After the market closed on Thursday, Visa Inc.(V) reported better-than-expected revenue , sending shares 1.2% higher.

Shares of Mattel Inc.(>> Mattel, Inc.) slumped 9.3% after the toy maker's quarterly results out late Thursday fell short of Wall Street estimates .

Other markets: Stocks in Asia closed mainly higher , boosted by the higher close in the U.S. on Thursday.

Oil prices moved lower while gold prices were largely flat. The dollar inched higher against other major currencies, with the ICE Dollar Index up 0.1%. The yield on the 10-year Treasury note was unchanged at 2.23%.

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