Stocks
fall for the week on rising trade tensions
The S&P 500 posted a loss of more than 1
percent for the week, despite a 0.2 percent gain on Friday.
The Dow Jones industrial average also fell
more than 1 percent on the week as shares of Boeing dropped 6.8 percent on trade
tensions.
Tariffs on steel and aluminum imports are
expected to come into effect in the coming weeks, after Trump signed two
declarations last week.
A slight gain on Friday was not enough to stop stocks
from posting a loss this week, weighed down by fears of a possible trade war
and White House turmoil.
The S&P 500 notched a 1.2 percent
loss for the week, despite a 0.2 percent gain on Friday. The Dow Jones industrial
average also fell 1.5 percent on the week as shares of Boeing
dropped 6.8 percent on the trade tensions. The Dow closed 72.85 points higher
on Friday at 24,946.51.
The Nasdaq composite closed
flat at 7,481.99 amid a 1.4 percent decline in Google-parent Alphabet and a 0.7
percent fall in Amazon shares. The index also fell 1 percent for the week.
Tariffs on steel and aluminum imports are expected to
come into effect in the coming weeks, after Trump signed two declarations last
week. While Canada and Mexico are exempt from the deal, investors worry that
countries around the world including China may strike back.
"The market is still vulnerable to headlines,
particularly with regard to trade and any retaliation," said Quincy
Krosby, chief market strategist at Prudential Financial. We're "waiting
for reaction from the European Union and reaction from the Chinese in terms
retaliatory responses."
Also on investors' minds, Krosby added, is
the two-day Federal Open Market Committee monetary policy meeting next week,
with Wall Street preparing for new Federal Reserve Chair Jerome Powell to lead
bankers in raising rates.
"It's Jerome Powell's first conference and the
market expects a rate hike ... [investors] will also be paying attention to his
comments and the press conference," Krosby said. "He's extremely
fluent in the language of the Fed, extremely fluent in the thinking of the
Fed."
In political news, President Donald Trump has reportedly
decided to remove national security advisor H.R. McMaster from the U.S.
administration, according to a Thursday report by the Washington Post. The
White House has, however, denied that any changes are set to emerge within the
National Security Council.
Adding to the political drama, CBS News reported on
Friday that White House chief of staff John Kelly, too, could depart the
administration as early as today. Fears that the chief of staff could be on his
way out were kept at bay, however, after The Wall Street Journal reported
that Trump and Kelly settled on a temporary
"truce."
Kelly, rattled by President Trump's abrupt firing of
Secretary of State Rex Tillerson via Twitter earlier in the week, had told
colleagues to start looking for new jobs, the Journal reported. Tillerson's
dismissal comes a week after Gary Cohn resigned as the National Economic
Council's director.
"I think the market has understood for a while that
this is a chaotic White House," said Michael Shaoul, chairman and CEO of
Marketfield Asset Management. He noted that stocks have been trading in a close
range recently. "I think it will take more economically driven or
corporate-driven news for the market to make up its mind."
The Commerce Department said housing starts declined 7
percent in February, a bigger-than-expected fall. Building permits, meanwhile,
fell 7.7 percent last month.
Elsewhere, consumer sentiment rose to a level not seen
since 2004 in March, according to a preliminary reading from the University of
Michigan. Meanwhile, the Labor Department said job openings increased to 6.3
million in January, a record.
"This week investors have been focused on
Washington," said Jeff Kravetz, regional investment strategist at U.S.
Bank Wealth Management. "But the narrative seems to be changing with
strong economic numbers."
"I think investors are going to be focused on
economic data" and the Federal Reserve next week, Kravetz said.
In corporate news, Adobe Systems reported
better-than-expected quarterly earnings, sending its stock up 3.1 percent.
Meanwhile, Walmart responded to accusations of issuing
misleading e-commerce results, calling the person a "disgruntled former
associate." Walmart shares rose 1.9 percent.
