The main Wall Street indexes ended the Friday trading session with declines after CNBC reported that talks between China and the US were stagnating.
The blue-chip index Dow Jones Industrial Average ended the day with a fall of 98.68 points to 25,764 points. The broader S&P 500 wiped out 0.58% of its value and reached a level of 2,859.53 points. The technology benchmark Nasdaq Composite recorded a drop of 1.04% to 7,816.29 points.
This is the fourth consecutive weekly decline for Dow Jones.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was up 4.38% to 15.96.
The US officials reported to CNBC that planned trade talks with China were frozen after the Trump administration imposed sanctions against Chinese telecoms companies. The American delegation was invited to Beijing earlier this week.
The information pushed Dow Jones back into the red territory and within the last hour of the trade, the index lost the growth of about 30 points, while S&P 500 and Nasdaq Composite increased their decline.
Earlier this week, the administration took measures to prevent US companies from doing business with Chinese technology giant Huawei. Now, US companies that want to work with the Chinese giant must be licensed.
China also responded and the country’s trade ministry spokesman Gao Feng said on Thursday that the US has embraced “rude behaviour” with its recent actions on the trade front and regretted that “the country unilaterally escalates trade disputes that create serious barriers to negotiations”.
Last week, both countries exchanged duties on imports of goods worth hundreds of billions of dollars, which hampered the trade talks, which were close to their end.
Wall Street indexes started the week with mass sell-offs on Monday. They were followed by three consecutive days of growth, but that was not enough to prevent weekly drops. Dow fell by 0.7% this week, recording its longest series of weekly declines since May 2016. The S&P 500 and Nasdaq Composite wiped out 0.8% and 1.3% respectively.
In the bond markets, yields on 10-year and 30-year US Treasuries declined to 2.394% and 2.825%, respectively.
Corporate stocks performance
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 2186 to 765 and 128 ended unchanged; on the Nasdaq Stock Exchange, 1878 fell and 770 advanced, while 82 ended unchanged.
Apple’s stocks declined by 0.6%, bringing their weekly decline to 4.1%.
Meanwhile, the stocks of Caterpillar lost more than 3%.
Huawei’s US suppliers, such as Qualcomm, Qorvo and Micron Technology, declined by 1.6%, 6.1% and 3.4% respectively.
Broadcom dropped by 2.5% and sank further below its 50-day and 10-week moving averages. The diversified chipmaking giant would flash a key defensive sell signal if it cannot rebound back above the 10-week line in a timely manner.
The shares of Deere fell by more than 7.5% after the company posted lower-than-expected earnings. It referred to the continuing trade war as a cause of her disappointing results.
The shares of Pinterest sagged nearly 13% lower following Q1 results. While revenue grew sharply (up 54% to 201.9 million USD) the social media site posted a net loss of 0.07 USD per share. In the fourth quarter of 2018, Pinterest earned 0.09 USD per share.
The stocks of 3M Company continue trading at 52-week lows, wiping out another 1.58% on Friday.
The top performers on the S&P 500 were Under Armour Inc A (+7.77%) and Applied Materials Inc (+2.5%), while on the flip side were Deere & Company (-7.65%), Pacific Gas & Electric Co (-6.33%) and Qorvo Inc (-6.14%).