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Markets Hunker Down Ahead Of G7, Fed; But Surf’s Way Up For Zumiez

Leading indexes wrestled to hold narrow gains in late trade Thursday, as concerns about Friday’s G-7 meeting in Quebec and next week’s Fed meeting kept a lid on investor optimism. Zumiez (ZUMZ) wowed investors in after-hours trade, with DocuSign (DOCU) not far behind, while Broadcom (AVGO) bested quarterly expectations.

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The Dow Jones industrial average maintained its lead, with futures trading 0.2% above fair value. Nasdaq 100 and S&P 500 fought to maintain fractional gains.

Positive trade news held the Dow above 25,000 on Thursday, as the Nasdaq withdrew 0.7% and the S&P 500 wrestled with a fractional decline. The losses snapped a four-day run up by both the Nasdaq and the S&P 500. But it left both indexes with solid gains for the week heading into Friday’s session.

The Dow clearly has the market’s favor for the week, riding a 2.5% gain heading into Friday’s session.

Market Eyes G-7, Awaits Fed Rate Decision

The G-7 confab of top global leaders begins Friday in Quebec. The gathering typically doesn’t generate market-moving news. But leaders this year wade into a labyrinth of trade uncertainties and contests tied both to the U.S. restructuring of its trade norms and to Britain’s fast-approaching exit from the European Union.

Markets may also be hunkering down ahead of next week’s Fed meeting. Markets fully plan on a rate target hike, but will be keenly interested in whether the general Fed mood is for one or two more hikes before the end of the year. Bonds reversed course and gained ground on Thursday. That allowed the 10-year yield to ease from 2.99% early in the day to 2.92%.

Zumiez, DocuSign Soar; Broadcom Eases On Q2 Results

Chipmaker Broadcom was the heavyweight earnings report delivered after Thursday’s close. The San Jose, Calif.-based company easily outpaced analysts’ fiscal second-quarter targets, and hoisted Q3 revenue guidance past consensus views. Shares eased 0.6% — too small a change to indicate what direction they might head at Friday’s starting bell.

Teen retail has been a niche worth watching this week. On Thursday, youngster-geared dollar store Five Below (FIVE) bolted 22% higher after reporting earnings late Wednesday. On Thursday afternoon, skate and surf shop Zumiez carved a 12% advance after reporting a narrower-than-forecast first-quarter loss and revenue growth above expectations. The stock was in a buy range after breaking out Tuesday above a 26.30 buy point in a cup-with-handle base.

Enterprise software IPO DocuSign inked an 8% after-hours gain. The San Francisco-based developer reported earnings of a penny per share — its first profitable quarter. Revenue rolled ahead 37%. Both numbers were above expectations, and the company reported a 33% surge in bookings, far above consensus views. The stock is extended after clearing an IPO base in late May, and ended Thursday’s session up 93% from its April IPO price.

On the downside, LED chipmaker Cree (CREE) dumped 3.5% following its announcement that CFO Mike McDevitt planned to retire. McDevitt will remain until a successor is appointed, and will remain available as a consultant in the future. Cree also affirmed its fiscal Q4 guidance, with revenue ranging from $390 million to $410 million, and EPS between 5 cents and 9 cents. Cree shares are extended after clearing a two-month cup base in late May.

Crude Prices Pop, Rig Data Due Friday

Oil prices bolted higher Thursday, boosted by data showing a drop in Venezuela crude exports and by concerns that Saudi Arabia and Russia might maintain their two-year production cap. West Texas Intermediate swung up 1.9%, to just below $66 a barrel, a fraction higher for the week. Europe’s Brent crude benchmark climbed 2% to above $77.

Oil prices — particularly WTI — could see some effect Friday when Baker Hughes (BHGE) releases its weekly rig census at 1 p.m. ET.

Wholesale inventories data for April are due from the Commerce Department at 10 a.m. ET Friday.

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