U.S. stock indexes stemmed an early slide Friday, finishing mostly higher and nudging the benchmark Standard & Poor’s 500 index to its second weekly gain in a row.
Gains by technology and consumer goods companies outweighed losses by financial stocks and retailers as investors continued to size up corporate earnings reports.
Before a late-in-the-session flurry of buying, the market had been on pace to finish lower; investors were hitting pause after a tumultuous two months where the index followed up its worst December since 1931 with its best January in three decades.
“Earnings are coming in good — we’re seeing over 15% growth — but there are some concerns about the next quarter that growth is going to be pretty close to zero,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management.
The S&P 500 rose 1.83 points, or 0.1%, to 2,707.88. The Dow Jones industrial average fell 63.20 points, or 0.3%, to 25,106.33.
The Nasdaq composite edged up 9.85 points, or 0.1%, to 7,298.20. The Russell 2000 index of smaller companies edged up 0.77 points, or 0.1%, to 1,506.39.
Traders have been worried about predicted slowdowns in economies around the world, with the U.S.-China trade war adding to the strain. Warnings this week about slower growth from Europe and the United Kingdom hit hard, helping to derail a five-day winning streak for the S&P 500.
It hasn’t been all bad news, however. Companies have been reporting better-than-expected earnings for the last quarter of 2018, and the Federal Reserve has indicated it will take a more patient approach to raising interest rates. Still, concerns are building about whether profits can keep growing this year, especially after companies’ strong gains in 2018 following a sweeping corporate tax cut.
“The markets are looking forward to an earning season that might be a little bit challenging for the first quarter, because they’re going to be having to jump over a higher bar,” Cavanaugh said.
Across the S&P 500, analysts are forecasting earnings per share to drop 1.8% in the first quarter compared with a year earlier. They were calling for growth just a few weeks ago, and if the updated forecasts prove true, it will be the first decline in nearly three years. For full-year 2019, earnings by S&P 500 companies are expected to grow 5%.
Technology stocks drove much of the market’s late-day recovery Friday. Motorola Solutions led the pack, leaping 14.1%.
Financial stocks took some of the heaviest losses; they were hurt by a drop in interest rates, which can limit the profits banks make from lending money. Morgan Stanley shares slid 1.6%.
Wells Fargo shares fell 0.9%. Problems with the company’s online and mobile banking services, as well as its ATMs, lingered into a second day Friday as the bank continued to recover from a possible fire at one of its data centers. It said most of the disrupted services have been restored.
Treasury yields fell and prices rose as investors continued to seek out traditionally safe investments. The yield on the 10-year Treasury note fell to 2.63% from Thursday’s 2.65%. It had been above 3% as recently as December.
Mattel surged 23.2%, one of the biggest gains in the S&P 500, after reporting a bigger-than-expected profit for its latest quarter. Rival toymaker Hasbro fell 1% after its own earnings report fell short of expectations.
Qorvo declined 3% even though the chipmaker reported stronger quarterly earnings than analysts expected. Investors focused instead on its revenue forecast for the current quarter, which was below analysts’ expectations. The company cited weakness across the smartphone market.
Goodyear Tire & Rubber dived 9.1%, the biggest drop in the S&P 500, after reporting weaker-than-expected profit for last quarter. The company cited some weakness in China, which has been a big source of concern for investors recently. The world’s second-largest economy is in the midst of a sharp economic slowdown, and it’s a huge market for many big U.S. companies.
Amazon.com dropped 1.6% after its chief executive, Jeff Bezos, said he was the target of blackmail by the publisher of the National Enquirer, which he said threatened to publish revealing personal photos of him. Bezos, who is also the owner of the Washington Post, has been locked in an increasingly tense standoff with President Trump, and the Enquirer has been a strong backer of Trump in the past. The Enquirer’s publisher said Friday that it acted lawfully while reporting the story and will look into the claims.
Amazon is one of the biggest stocks in the S&P 500, so its movements have a larger effect on index funds than other stocks’ movements do.
Markets around the world have been lurching up and down in recent months as investors worry about fallout from the U.S.-China trade war. Trump said Thursday that he doesn’t plan to meet Chinese leader Xi Jinping before their cease-fire on tariffs expires in early March.
Unless U.S. and Chinese negotiators come to a new agreement, the United States is expected to raise import taxes to 25% from 10% on $200 billion worth of Chinese goods.