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Stocks edge down as traders shrug off Trump comments

Stocks edge down as traders shrug off Trump comments
People walk past the New York Stock Exchange. (Richard Drew / Associated Press)

U.S. stocks inched down Friday as bond yields jumped, a shift that helped banks but hurt companies that pay big dividends. The dollar fell after President Trump said China is manipulating its currency.

Companies such as Microsoft and Honeywell rose as investors were pleased with their quarterly reports, but General Electric stumbled. Stocks wobbled all week as investors reacted to solid company results and to heightened trade tensions. The Standard & Poor’s 500 index was virtually flat for the week; the Russell 2000 index, which is made up of smaller companies that do more business inside the United States, rose 0.6%.

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In the last two days, Trump criticized the Federal Reserve for raising interest rates, said he's willing to put tariffs on all U.S. imports from China, and said China, the European Union and others are harming the United States by weakening their currencies and reducing interest rates. Stocks weren't affected, but the dollar declined and short-term bond yields slipped, suggesting investors wondered if the Fed might raise interest rates more slowly.

"If there's a toss-up between raising and not raising [interest rates], you wonder what role these types of comments might possibly play," said Sameer Samana, a strategist for the Wells Fargo Investment Institute.

Samana said he doesn't think the Fed will make big changes to its policies based on Trump's comments, even if the president starts advocating more forcefully for lower rates. But it's something investors will have to think about.

"We think the Fed has independence and they'll continue to do the right thing," he said. "This is one more item that just creates noise in markets."

The S&P 500 index slipped 2.66 points, or 0.1%, to 2,801.83 on Friday. The Dow Jones industrial average edged down 6.38 points to 25,058.12. The Nasdaq composite slipped 5.10 points, or 0.1%, to 7,820.20. The Russell 2000 index of smaller-company stocks fell 4.50 points, or 0.3%, to 1,696.81.

Short-term bond yields inched up. The yield on the two-year Treasury note rose to 2.60% from 2.59%.

Long-term bond prices dropped. The yield on the 10-year Treasury note rose to 2.90% from 2.85%. That helped banks because bond yields are used to set interest rates on many kinds of loans, including mortgages. JPMorgan Chase shares rose 1.3% to $111.28. Bank of America shares rose 1.6% to $30.13.

The dollar dropped sharply, to 111.52 yen from 112.46 yen. The euro rose to $1.1726 from $1.1644.

Microsoft continued to set records after its fiscal fourth-quarter results topped Wall Street forecasts and its cloud computing division continued to grow. The company said it's being helped by its rivalry with Amazon, because some retailers are reluctant to team up with Amazon on cloud computing services while they compete with Amazon in sales. Microsoft shares climbed 1.8% to $106.27.

General Electric slid 4.4% to $13.12 after it said its power business continued to struggle as revenue and orders decreased. GE, which has been selling and splitting off businesses, also cut its forecast for how much cash its businesses will generate.

Benchmark U.S. crude climbed 1.4% to $70.46 a barrel in New York. Brent crude, used to price international oils, rose 0.7% to $73.07 a barrel in London.

Wholesale gasoline rose 1.2% to $2.07 a gallon. Heating oil rose 0.7% to $2.10 a gallon. Natural gas fell 0.4% to $2.76 per 1,000 cubic feet.

Gold rose 0.6% to $1,231.10 an ounce. Silver gained 1% to $15.55 an ounce. Copper jumped 2.2% to $2.76 a pound.

In overseas markets, Germany's DAX lost 1%, France's CAC 40 slid 0.3%, and Britain's FTSE 100 edged down 0.1%. South Korea's Kospi rose 0.3%. Hong Kong's Hang Seng gained 0.8%. Japan's Nikkei 225 fell 0.3%.

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