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Stock Market Mixed, But Airlines Post Gains On Oil’s Price Drop

U.S. stock indexes limped toward gains for the week near midday Friday, despite a nervous atmosphere driven by news on trade differences with China and a canceled summit with North Korea.

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President Trump left the door open to reviving talks with Pyongyang after Trump said North Korean officials put out “a very nice statement” Friday.

The Nasdaq advanced 0.4%, while the S&P 500 and the Dow Jones industrial average each fell 0.1%. The small cap S&P 600 rose 0.1%.

Volume declined on both major exchanges.

Airline stocks led the market, partly because softening crude oil prices lower airline fuel costs. Light sweet crude dropped 3.3% to $68.39 a barrel, on track for its fourth daily loss in a row. Crude is now about 6% below its high Tuesday of $72.83.

Seven airline stocks climbed with volume more than twice the usual pace.

Alaska Air Group (ALK) rose 4.5%; American Airlines (AAL) gained 4%; JetBlue Airways (JBLU), 3.5%; Southwest Airlines (LUV), 4%; United Continental (UAL), 2%; Allegiant Travel (ALGT), 3.5%; and Ryanair (RYAAY), 1.3%.

Year to date, the airline stocks are down about 5%, while light sweet crude is up 13%. Percentages were as of midday Friday.

Only four days ago, Ryanair CEO Michael O’Leary told CNBC that $80 oil will force some rival regional airlines into bankruptcy this winter. Ryanair is based in Ireland. Brent crude, which is extracted from the North Sea, was trading just under $77 a barrel Friday.

Gains In Conservative Stocks

Among IBD’s 197 stock industry groups, the day’s top 10 performers included soap, tobacco and food groups. Those conservative instruments accounted for half of the top 10 performers.

Turning Point Brands (TPB) coasted 0.7% to a new high. The Kentucky-based tobacco products company is expected to grow earnings 35% this year.

Strength in conservative stocks is seldom a good sign. Bulls prefer to see leadership from more aggressive growth areas.

(For updates on this story and other market coverage, check IBD’s stock market news today.)

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