Strong Consumer Data Lifts US Stocks; Tesla Tumbles On Bumpy Pickup Launch

There are fears that the US bill supporting Hong Kong rights, which Beijing has condemned, could damage the long-running China-US trade talks AFP / Philip FONG

Wall Street stocks on Friday cut their losses for the week following solid consumer data that lifted indices after three down sessions.

But Tesla shares plunged following a bumpy launch of an electric pickup truck.

Investors welcomed a University of Michigan report which showed higher consumer confidence in November, while shares of Nordstrom and Gap after earnings reports.

"The market is focused on the health of the consumer going into the holiday shopping season," said Adam Sarhan of 50 Park Investments.

"US consumers make up two thirds of the economy so the fact that the consumer spending is so strong, both on Main Street and Wall Street, especially as we head into the holiday season, is significant."

The broad-based S&P 500 ended up 0.2 percent, but ended the week down 0.3 percent.

London was the standout equity performer in Europe on Friday, rising well over one percent, while Frankfurt and Paris advanced more modestly as they had to absorb a sobering set of data showing the eurozone's economy has almost stalled after successive months of manufacturing decline.

Stocks have been under pressure much of the week amid rising uncertainty over US-China trade talks. There were more ambiguous statements on Friday.

US President Donald Trump told Fox News the two sides are "potentially very close" to finalizing a deal but that he was "not anxious" to make one.

Earlier, Chinese President Xi Jinping said he hoped a deal was close at hand but that he was "not afraid" to "fight back" if necessary.

The grinding US-China trade dispute has hung over markets for more than a year. Word of preliminary agreement in early October helped lift stocks to records but markets have pulled back somewhat this week as the two sides have struggled to finalize the deal.

Meanwhile, Tesla slumped 6.1 percent after its launch of an all-electric pickup truck drew several lackluster reviews, with analysts saying the space-age design was unlikely to challenge top-selling models by Ford and other conventional car companies.

The launch also included an embarrassing moment for Chief Executive Elon Musk, who was heard using an expletive when the vehicle's supposedly indestructible windows cracked after being struck with a steel ball.

Some "important unanswered questions" hang over the vehicle, said Deutsche Bank, including whether the design was "too polarizing" and whether it would be able to carry heavy loads without requiring customers to opt for higher-cost trims.

"Will commercial buyers trust Tesla's build quality?" Deutsche queried. "While the materials used appear robust, there could be questions about the truck's durability when used under work conditions, especially in light of its seemingly unibody construction.

"And the shattering of the truck's unbreakable glass windows during the live demonstration was not a good start."