Stocks fall, pulling S&P 500 to its second straight weekly loss

Stocks on Wall Street slipped Friday, bringing the Standard and Poor’s 500 index to a second straight weekly loss, as worries about a potential escalation in the U.S.-China trade war erased early gains.

Technology companies led Friday’s broad slide as investors weighed a news report saying the Trump administration is considering ways to limit U.S. investments in China.

Uncertainty over the long-running trade war has fueled volatility in the market and stoked worries that the effects of tariffs and other tactics employed by the countries against each other is hampering growth in the U.S. economy and corporate profits.

The possibility that the United States is weighing another way of applying pressure on China dampened investors’ already cautious optimism that the world’s two biggest economies might make progress as their representatives resume negotiations next month.

“Here we are, just two weeks out [from the next round of U.S.-China talks], and now we’re doing things to sort of ruffle feathers again,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “That kind of spooked the market.”

The S&P 500 index fell 15.83 points, or 0.5%, to 2,961.79, causing the benchmark index to finish the week with a 1% loss. It’s 2.1% below the all-time high it set in July.

The Dow Jones industrial average slipped 70.87 points, or 0.3%, to 26,820.25. The Nasdaq, which is heavily weighted with technology stocks, dropped 91.03 points, or 1.1%, to 7,939.63.

Investors also shifted money out of smaller-company stocks. The Russell 2000 index declined 12.85 points, or 0.8%, to 1,520.48.

Bond prices were little changed. The yield on the 10-year Treasury note held at 1.68%.

Investors sized up mixed economic data on consumer spending and durable goods orders.

The Commerce Department said spending by U.S. consumers rose just 0.1% in August, the smallest gain in six months, even as incomes increased at a solid pace. A separate report showed orders to U.S. factories for big-ticket manufactured goods rose slightly in August, though a key sector that tracks business investment plans declined.

The economic reports followed data Thursday that indicated the U.S. economy grew at a modest 2% annual rate in the second quarter — a sharply slower pace than earlier in the year.

Technology stocks, which are particularly sensitive to swings in the U.S.-China trade conflict, fell Friday. Microsoft slid 1.3%. Adobe dropped 2.2%. Micron Technology slumped 11.1% — the biggest decliner in the S&P 500 — after the chipmaker issued a weak profit forecast and a sales warning, citing the trade war.

Communications stocks also took heavy losses. Twitter fell 2.6%. Activision Blizzard went down 3.5%.

The market has been in a slump all week as investors pull back amid trade-war worries, reports of sluggish economic growth and an impeachment inquiry into Trump.

The tech-heavy Nasdaq finished the week with a 2.2% loss. Smaller-company stocks also had a particularly rough week; the Russell 2000 slid 2.5%.

Facebook had its worst week of the year. It’s off 6.8% for the week after media reports suggesting the Justice Department is considering opening an antitrust investigation into the social media company.

Financial stocks bucked the broader market slide Friday, with Wells Fargo leading the way. The bank’s shares climbed 3.8% after it named its third CEO in as many years. Charles Scharf, currently CEO of Bank of New York Mellon, will take the helm.

LATAM Airlines soared 31.1% after Delta Air Lines invested $1.9 billion in the airline, which focuses on Latin American routes. The investment gives Delta a 20% stake in the company.

Benchmark crude oil fell 50 cents to settle at $55.91 a barrel. Brent crude oil, the international standard, fell 83 cents to close at $61.91 a barrel. Wholesale gasoline fell 1 cent to $1.65 a gallon. Heating oil fell 2 cents to $1.94 a gallon. Natural gas fell 1 cent to $2.40 per 1,000 cubic feet.

Gold fell $8.80 to $1,499.10 an ounce. Silver fell 26 cents to $17.55 an ounce. Copper rose 2 cents to $2.58 a pound.