By Ryan Vlastelica
Nasdaq registered a 0.3% weekly decline
The Dow Jones Industrial Average on Friday notched a second
straight all-time high, but a slump in megacapitalization
technology and internet-related stocks weighed on the broader
market, pressuring the Nasdaq.
Where are the major benchmarks trading?
The Dow Jones Industrial Average rose 75.67 points, or 0.3%, to
26,732, after logging its first all-time high on Thursday since
Jan. 26. However, the S&P 500 edged, lower, closing 1.27 points
to 2,929.48, a rise of less than 0.1%, after the broad-market
benchmark posted its first record since Aug. 29. The Nasdaq
Composite Index , which remains about 2% below record levels, fell
41.28 points to 7,986.96, a decline of 0.5%.
For the week, the Dow is up 2.3% and on booked its biggest
weekly percentage gain since July. The S&P 500 rose 0.9%. Both
the Dow and the S&P recorded their second straight weekly gain,
as well as their 10th positive week of the past 12. The Nasdaq
ended with a 0.3% weekly fall.
Both the S&P and the Nasdaq have hit multiple records over
the past few months, thanks in large part to the outperformance of
technology and internet stocks. While Apple fueled the Dow's
advance
(http://www.marketwatch.com/story/dows-first-record-since-january-powered-by-surge-in-apples-stock-2018-09-20)
to all-time highs on Thursday, this is a sector the average has
less exposure to, a factor that has limited its gains until
recently, when industrial stocks have started to lead the
market.
Read: Not just tech: The stock-market rally is broader than it's
given credit for
(http://www.marketwatch.com/story/not-just-tech-the-stock-market-rally-is-broader-than-its-given-credit-for-2018-09-19)
What's driving the market?
Markets have been grinding higher in a low-volatility market for
several weeks. The gains have largely been supported by improving
economic data, which have pointed to strong economic fundamentals,
particularly in contrast to other regions, where stocks have been
struggling.
On Thursday, gains came as jobless claims dropped to their
lowest since November 1969, a sign of an extremely strong labor
market. Separately, the Philadelphia Fed manufacturing index jumped
more than expected in September, while an Index of Leading Economic
Indicators suggested the U.S. economy could look forward to 3%
economic growth
(http://www.marketwatch.com/story/us-economy-poised-for-strong-second-half-of-2018-leading-indicators-show-2018-09-20)
in the second half of 2018.
In the latest data, a reading on the manufacturing sector rose
to 55.6 in September from the previous reading of 54.7. A report on
the services sector dipped to 52.9 from 54.8. Both are from IHS
Markit.
These signs of economic strength have been enough for investors
to ignore persistence evidence of escalating tensions between the
U.S. and China--among other regions--on trade policy. President
Donald Trump has announced nearly $500 billion in tariffs on
Chinese goods this week; China retaliated with measures of its own
and said it would introduce more if the U.S. tariffs take
effect.
Don't miss:Dow, S&P 500 records belie festering fear that
China and the U.S. 'are on a collision course'
(http://www.marketwatch.com/story/dow-sp-500-records-belie-festering-fear-that-china-and-the-us-are-on-a-collision-course-2018-09-20)
While many investors are concerned that the trade issue could
escalate into a full-blown trade war, they have so far been
heartened by the fact that the issue hasn't shown much impact in
economic data or corporate results. Furthermore, some market
watchers have said that recent developments haven't been as severe
as expected, leaving room for optimism.
South Korean Finance Minister Kim Dong-yeon expressed optimism
about signing a revised U.S. free-trade pact into law
(http://www.marketwatch.com/story/south-koreas-finance-minister-has-high-hopes-for-new-trade-deal-with-us-2018-09-20),
though lawmakers in Seoul have threatened to block the deal if
Washington imposes new tariffs on Korean autos and auto parts.
What are market analysts saying?
"We don't have a full-out trade war, and at this point, most
people understand the impact of what's happened so far won't be too
big on margins. And since earnings and revenue growth are as high
as they've ever been, it's perfectly fair for stocks to be at
records," said Peter Lazaroff, co-chief investment officer at
Plancorp, which has $3.9 billion in assets.
"However, given that valuations are pretty high, the prospect of
our getting a pullback should be at the forefront of investors's
minds. That would just be part of a healthy, functioning market,
however. Overall markets aren't euphoric or complacent about the
risks out there."
What stocks are in focus?
Micron Technology Inc.(MU) shares fell 2.9% a day after it
reported strong quarterly results, though it gave an outlook that
was below expectations
(http://www.marketwatch.com/story/micron-stock-gains-as-earnings-deflect-doubts-about-memory-market-2018-09-20).
The results could spark broader weakness in the chip space if it
leads to concerns that the sector's sky-high growth could be coming
to an end
(http://www.marketwatch.com/story/micron-forecast-creates-jitters-that-big-memory-chip-party-is-ending-2018-09-20).
The broad semiconductor sector, as gauged by the iShares PHLX
Semiconductor ETF, fell 0.3%. Micron is a major component of that
popular ETF.
Among other notable names, shares of Apple Inc. (AAPL) fell
1.1%, those for Facebook Inc. (FB) slumped by 1.9%, Amazon.com Inc.
(AMZN) gave up 1.5%, while Google-parent Alphabet
Inc.(GOOGL)(GOOGL) fell 1.6%. All four had an outsize drag on the
Nasdaq.
Adobe Systems Inc. (ADBE)agreed to buy software maker Marketo
(http://www.marketwatch.com/story/adobe-plans-to-acquire-marketo-for-475-billion-2018-09-20)
from a private-equity firm for $4.75 billion. Shares fell 2.1%.
Shares of Dow component AT&T Inc. (T) rose 1% after UBS
upgraded the stock to buy
(http://www.marketwatch.com/story/att-stock-gains-after-ubs-upgrades-to-buy-2018-09-21).
GTx Inc.(GTXI) plummeted more than 92% after the company said
its therapy intended for postmenopausal women with stress urinary
incontinence didn't meet the primary endpoint in a phase 2 clinical
trial
(http://www.marketwatch.com/story/gtx-inc-stock-drops-94-premarket-after-phase-2-trial-failure-2018-09-21-8913959).
Medtronic PLC (MDT) said it would buy Mazor Robotics Ltd.
(MZOR.TV)for $1.64 billion
(http://www.marketwatch.com/story/medtronic-to-buy-mazor-robotics-for-164-billion-2018-09-20).
Shares of Medtronic gained 0.4% while U.S.-listed Mazor shares
surged by more than 10%.
Wells Fargo & Co.(WFC) late Thursday said it would reduce
jobs as part of its "ongoing transformation"
(http://www.marketwatch.com/story/wells-fargo-announces-plan-to-cut-tens-of-thousands-of-jobs-2018-09-20)
to address industry trends and changes in customer behavior. Shares
were little changed. Shares of the bank rose by 3.3%.
Where are other markets trading?
Asian stocks rose
(http://www.marketwatch.com/story/nikkei-again-leads-widespread-asian-market-gains-2018-09-20),
with shares in Shenzhen on track for their best week since July and
Japan's Nikkei at its highest level since January.
Crude-oil prices rose 0.7%
(http://www.marketwatch.com/story/oil-prices-climb-set-for-weekly-gain-ahead-of-oil-producer-gathering-2018-09-21),
while gold settled down 0.8%
(http://www.marketwatch.com/story/gold-edges-lower-but-aims-for-back-to-back-weekly-gain-ahead-of-fed-decision-2018-09-21).
The U.S. dollar index inched up by 0.3%.
(END) Dow Jones Newswires
September 21, 2018 22:15 ET (02:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.