Market Report

Tech leads U.S. stock slide; Dow index down 1%

In this Oct. 2, 2019, file photo specialist William Geier works on the floor of the New York Stock Exchange.  (AP Photo/Richard Drew, File)
In this Oct. 2, 2019, file photo specialist William Geier works on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)

The S&P 500 index closed out an uneven week of trading on Wall Street with its second straight weekly gain, even though stock indexes ended lower Friday.

Technology companies led the slide, which erased the major U.S. indexes' gains from the day before. Communication services, industrials and health care stocks also fell, outweighing gains in real estate companies, banks and elsewhere in the market.

The S&P 500 index fell 11.75 points, or 0.4%, to 2,986.20. The index is just 1.3% below its all-time high set in late July.

The Dow Jones industrial average dropped 255.68 points, or 1%, to 26,770.20. The Nasdaq lost 67.31 points, or 0.8%, to 8,089.54. The Russell 2000 index of smaller companies stocks gave up 6.36 points, or 0.4%, to 1,535.48.

All told, the S&P 500 ended the week with a gain of 0.5%. Last week, it notched a 0.6% gain.

Smaller stocks outpaced the broader market, a sign that investors are growing more confident. The Russell 2000 ended the week 1.6% higher after rising 0.8% last week.

Bond prices were little changed Friday. The yield on the 10-year Treasury held steady at 1.75%.

Investors continued to focus on company earnings reports. They're searching for a clearer picture on the impact that the trade war between the U.S. and China is having on corporate profits and the broader economy.

"To some extent, the bleeding's stopped, but now you need to figure out how healthy the patient is," said Willie Delwiche, investment strategist at Baird. "Earnings help with that, and economic data that we receive over the next couple of months will help with that."

While trading turned choppy this week, investors mostly applauded companies' results so far, including those from JPMorgan Chase, UnitedHealth Group and railroad operator Kansas City Southern.

That helped investors temporarily brush aside worries over the U.S.-China trade conflict. The early round of mostly good results could also help calm investors' fears about another dismal forecast for earnings growth.

Analysts expect profit to contract by nearly 5% for companies within the S&P 500, according to FactSet. Still, forecasts for declines in the first and second quarters were tempered as reporting progressed and companies finished those earnings seasons with tiny contractions instead.

Chipmakers helped pull technology sector stocks lower Friday. Micron Technology dropped 4.5% and Nvidia fell 2%.

Communication services stocks also accounted for a big slice of the selling. Netflix led the slide, tumbling 6.2%.

Boeing led industrial-sector stocks lower after news that the aircraft manufacturer waited months to disclose troubling internal communications between two of its employees about the company's now-grounded 737 Max jet. Boeing lost 6.8%.

Shares in several companies rose after they reported solid quarterly results.

ETrade Financial climbed 4.6% after reporting surprisingly good third quarter profit.

Coca-Cola gained 1.8% after the company edged out Wall Street's third quarter revenue forecasts on improved sales of Coca-Cola Zero Sugar and other drinks.

Meanwhile, Johnson & Johnson fell 6.2% after the company said it is recalling a single lot of its baby powder because a test found trace amounts of asbestos in one bottle.

Investors are in for another busy week of corporate earnings next week, including McDonald's on Tuesday, Boeing and Microsoft on Wednesday, and Amazon and American Airlines Group on Thursday.

Information for this article was contributed by Damian J. Troise of The Associated Press.

Business on 10/19/2019

Upcoming Events