UKX FTSE 100 Index

By Sue Chang, MarketWatch , Chris Matthews

Nasdaq pressured by Nvidia's double-digit slide

U.S. stocks closed mostly higher Friday after comments from President Donald Trump once again sparked hopes that a trade dispute with China could be resolved in the near term. But the Nasdaq bucked the trend to finish lower as a decline in chip maker shares, led by Nvidia Corp., dented sentiment in the technology sector.

How did the benchmarks fare?

The Dow Jones Industrial Average climbed 123.95 points, or 0.5%, to 25,413.22 and the S&P 500 index rose 6.07 points, or 0.2%, to 2,736.27. The Nasdaq Composite Index shed 11.16 points, or 0.2%, to 7,247.87.

For the week, the Dow fell 2.2%, the S&P 500 dropped 1.6%, while the Nasdaq declined 2.2%.

What drove the market?

Trump expressed guarded optimism over U.S.-China trade ties, 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 much as 221 points on the news, but then pared 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 upbeat about negotiations, and that investors shouldn't expect an imminent deal. Trump and Chinese President Xi Jinping are scheduled to meet at the sidelines of the G-20 summit in Buenos Aires later this month.

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

On the tech front, Nvidia 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 also came 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 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 were 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 there is so much 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.

"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," Joel Kulina, an analyst at Wedbush Securities, wrote in a note to clients.

What stocks were in focus?

Nvidia(NVDA) shares fell 19%. Nvidia had already declined 22% in the past three months, and the PHLX Semiconductor Index , a popular product for wagering on semiconductor shares, is down 1.2%.

The selloff was sparked Nvidia's quarterly results which missed revenue expectations for the third quarter and a forward guidance that was well below expectations. The selling was compounded by Stifel Nicolaus cutting its price target for the firm from $200 to $250.

Shares chip maker Advanced Micro Devices Inc. (AMD) fell 3.9% on broader concerns about the health of the chip sector.

Applied Materials Inc. (AMAT) rose 1.1% after the company reported a revenue beat, but guidance that fell short of Wall Street's targets.

Nordstrom Inc. (JWN) tumbled 14% 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 soared 38% while Edison International jumped 15%.

Post Holdings Inc.(POST) rallied 5.6% after the company reported fiscal fourth-quarter earnings and said it plans to sell a 20% stake in its Active Nutrition unit via an initial public offering (http://www.marketwatch.com/story/post-reports-disappointing-earnings-announces-ipo-for-active-nutrition-2018-11-15).

Shares of Viacom Inc. (VIA) advanced 2.5%, following an earnings report that showed the media giant beating earnings and sales expectations for the fiscal fourth quarter.

What data were in focus?

How are other markets trading?

Asian markets were mixed (http://www.marketwatch.com/story/asian-markets-mixed-as-chip-maker-stocks-fall-2018-11-15), 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%.

Crude oil futures ended flat (http://www.marketwatch.com/story/us-oil-prices-settle-flat-down-a-sixth-week-in-a-row-2018-11-16), gold settled higher and the U.S. dollar retreated (http://www.marketwatch.com/story/british-pound-bounces-after-worst-day-in-more-than-2-years-2018-11-16).

--Mark DeCambre contributed to this report

(END) Dow Jones Newswires

November 16, 2018 16:26 ET (21:26 GMT)

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