UKX FTSE 100 Index

By Mark DeCambre, MarketWatch , Chris Matthews

U.S. stock indexes traded mixed Friday, after comments from President Trump, suggesting that trade disputes with China could be resolved, caused the Dow and S&P to swing positive.

The Nasdaq has held its losses after a decline in shares of chip makers, led by Nvidia, helped to dent sentiment in the technology sector.

How did the benchmarks fare?

The Dow Jones Industrial Average was up 40 points, or 0.2%, to 25,329, but had been up more firmly; while the S&P 500 index was down 0.1% at 2,727. The Nasdaq Composite Index declined 48 points, or 0.7%, at 7,209.

For the week, the Dow is set to post a loss of 2.4%, the S&P 500 is on track to decline by 1.9%, while the Nasdaq is set to decline 2.5%.

What drove the market?

President Trump expressed guarded optimism Friday afternoon at the prospect of a U.S.-China trade pact, telling reporters that it may not be necessary to add new tariffs or raise existing ones on Chinese imports, and that he doesn't want to "put China in a bad position."

The Dow rose by as many as 220 points on the news, but then paired those gains after reports of White House officials (https://twitter.com/EamonJavers/status/1063494205304131586?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1063494205304131586&ref_url=https%3A%2F%2Fwww.cnbc.com%2F2018%2F11%2F16%2Fdow-jumps-after-trump-says-china-wants-to-make-trade-deal.html) walking back Trump's comments, saying the president was just being optimistic about negotiations, and that investors shouldn't expect an imminent deal. Trump and Chinese President Xi Jinping are scheduled to speak at the sidelines of the G-20 summit in Buenos Aires later this month.

Uncertainties around tariff spats have taken center stage on Wall Street this week and the vacillating narratives around progress in negotiations continue to whipsaw equity benchmarks.

On the tech front, shares of Nvidia Corp. fell sharply after reporting disappointing quarterly results late Thursday (http://www.marketwatch.com/story/nvidia-has-a-pascal-problem-and-its-stock-is-plunging-after-earnings-2018-11-15), contributing to a week filled with negative triggers. Other semiconductor stocks were also under pressure.

Opinion:'Crypto hangover' has Nvidia staggering into holidays with a big headache (http://www.marketwatch.com/story/crypto-hangover-has-nvidia-staggering-into-holidays-with-a-big-headache-2018-11-15)

Meanwhile, investors were closely watching developments in the U.K., with Prime Minister Theresa May defiantly pledging her commitment to seeing Britain's exit from out of the European Union, despite several top-level resignations and growing doubts about her leadership.

Although the events are playing out about 3,460 miles away from Wall Street, the dilemma--should it result in a hard Brexit, or no trade pact for the U.K.--could roil the financial world, some market participants believe (http://www.marketwatch.com/story/heres-why-brexit-turmoil-is-a-source-of-worry-for-us-investors-2018-11-15).

What stocks were in focus?

Nvidia shares (NVDA) fell 19%. Nvidia shares had already declined 22% in the past three months, and the PHLX Semiconductor Index , a popular product for wagering on semiconductor shares, is down 3% in 2018.

The Nvidia selloff was sparked by a Thursday-evening earnings release by the company, which showed it missing revenue expectations for the third quarter and issuing forward guidance well below expectations. The selling was compounded by Stifel Nicolaus cutting its price target for the firm from $200 to $250.

Applied Materials Inc. (AMAT) stock is in focus, after the company reported a revenue beat, but guidance that fell short of Wall Street's hopes, Thursday evening. The stock is up 0.9% Friday.

Shares chip maker Advanced Micro Devices Inc. (AMD) are falling 6% on broader concerns about the health of the chip sector.

Nordstrom Inc. stock (JWN) tumbled 14.7% after the retailer reported earnings (http://www.marketwatch.com/story/nordstrom-stock-down-13-after-mixed-quarterly-earnings-2018-11-15) for the third quarter well below analysts expectations.

California utilities PG&E Corp. (PCG) and Edison International(EIX) surged after investors fled these stocks earlier in the week on concerns that these companies may be held responsible for the deadly, ongoing wildfires in California.

Investors were soothed by assurances (http://www.marketwatch.com/story/pge-stock-soars-after-hours-as-puc-chief-says-bankruptcy-unlikely-2018-11-15) by California State Public Utilities Commission President Michael Picker, made in an interview with Bloomberg, that the state would be very reluctant to allow these firms to go bankrupt. PG&E shares are up 38.5% Friday morning, while Edison International stock is rising 14%.

Shares of Viacom Inc. (VIA) advanced 4.4%, following an earnings report that showed the media giant beating earnings and sales expectations for the fiscal fourth quarter.

What are strategists saying?

"Usually the upcoming holiday season is a great time for the markets, earnings have been strong, and we can still expect to see the lingering effects of tax cuts in the next couple of quarters," Michael Arone, chief investment strategist with State Street Global Advisors told MarketWatch.

That we're still seeing such volatility is a testament to how concerned investors are about slowing growth in tech companies that have provided market leadership for so long, U.S. China trade relations, rising interest rates, and the effects on both the global economy and U.S. multinational companies of a stronger dollar, Arone said.

Expect the tech sector to have a bad end to the week after dismal Nvidia earnings, Joel Kulina, analyst at Wedbush Securities, wrote in a note to clients.

"Tech sentiment remains very fragile, and rightfully so, given deteriorating trends across multiple end markets, and it's becoming increasingly clear that many [companies] across tech are experiencing declining visibility," Kulina wrote, warning that in the near-term tech investors should stick to the strategy "rallies are to be sold."

"Theresa May had a disastrous day yesterday, and investors are still on edge over the political situation in the UK," wrote David Madden, market analyst at CMC Markets U.K.

What data are in focus?

How are other markets trading?

Asian markets posted a mixed finish (http://www.marketwatch.com/story/asian-markets-mixed-as-chip-maker-stocks-fall-2018-11-15) Friday, with pressure on chip makers dragging the Nikkei down 0.6%, while Chinese benchmarks rose modestly. European stocks were weighed down by Brexit concerns (http://www.marketwatch.com/story/european-stocks-dragged-lower-by-tech-brexit-concerns-2018-11-16), as the pan-European Stoxx Europe 600 fell 0.2% and London's FTSE 100 declined 0.3%, while Germany's DAX fell 0.1%.

(END) Dow Jones Newswires

November 16, 2018 13:46 ET (18:46 GMT)

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