Select Page

Tech Stocks Drag Market Mostly Lower but Dow Hits 8-Day Winning Streak

Tech Stocks Drag Market Mostly Lower but Dow Hits 8-Day Winning Streak

Tech stocks weighed the market down, but the Dow ended higher for the eighth day in a row and more in Friday’s Stock Market Update.

A slide in technology stocks, along with losses in consumer-focused and real estate companies, offset solid gains in financial and industrial stocks.

Bond yields rose sharply after the government reported that Americans kept spending money in August, particularly on cars. The yield on the 10-year Treasury rose to 1.9% from 1.79% late Thursday.

That helped lift bank stocks, which rely on higher yields to set interest rates and make more money from loans. JPMorgan rose 1.9% and Citigroup rose 1.5%.

Industrial stocks notched some of the strongest gains. Boeing climbed 1.1% and Union Pacific added 2.2%.

The decline in technology stocks marked a reversal from Thursday, when the sector led a broad market rally. Apple and Broadcom were the heaviest weights holding the sector down. Apple is among several big technology companies being asked for documents as part of a Congressional antitrust investigation. Apple slid 1.9%.

Chipmakers fell after Broadcom warned that demand remains weak and couldn’t project when it will pick up again.

Optimism has been building on Wall Street all week as the U.S. and China make conciliatory gestures on trade a month ahead of planned negotiations. The week marks a stark contrast to the entire month of August, when both nations made increasingly damaging retaliatory moves to escalate the dispute that has threatened to slow global economic growth and potentially prompt a recession.

Investors are also closely watching the latest economic data. The Commerce Department’s retail sales report beat economists’ forecasts, but showed that consumers are becoming more cautious. The increase came from auto sales. Without those sales, spending was flat for the first time since February.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 fell 2 points, or 0.1%, to 3,007, but finished with a weekly gain of 1%. The Nasdaq, which has a heavy weighting of tech stocks, slipped 17 points, or 0.2%, to 8,176. The Dow Jones industrials posted its eighth straight gain, rising 37 points, or 0.1%, to 27,219.

Major indexes in Europe moved broadly higher. Asian stocks finished with broad gains.

WINNING WEEK: The broader market is coasting toward another weekly gain and the S&P moved closer to its all-time high of 3,025.86 set on July 26. But, smaller-company stocks are set to be the big winners this week. The Russell is up 4.9%, far outpacing the Nasdaq’s 1% increase and the S&P 500’s 1.1% gain.

The smaller, U.S.-focused companies in the Russell are seen as more insulated from the volatile swings in the U.S.-China trade war.

YIELDING GAINS: A steady rise in bond yields propelled bank stocks higher this week. The yield on the 10-year Treasury note is up more than 30 basis points from 1.55% late last week as investors grow more confident about economic growth amid easing trade war tensions. JPMorgan is up 6.7% and Bank of America gained 9% this week, far outpacing the broader market.

STALE CHIPS: Broadcom fell 3.4% after the chipmaker reaffirmed its already disappointing revenue forecast for the year. The company said demand “bottomed out”, but will remain weak because of an “uncertain environment.” Broadcom gets about 48% of its revenue from China.

TRADE BOOST: Mining company Freeport-McMoRan climbed 3.7% as easing trade tensions between Washington and Beijing led to a spike in copper prices.

© The Associated Press. All rights reserved.