Trading has been more subdued and cautious on Wall Street, following China's report Thursday of a surge in cases of a new virus that raised fresh concerns about global economic growth. Investors had largely set aside uncertainty about the potential economic fallout from the outbreak the past two weeks. Stocks ended lower on Thursday for only the second time this month. Earlier in the week, the S&P 500 and Nasdaq set all-time highs three days in a row.
With U.S. financial markets scheduled to be closed Monday for the President's Day holiday, it's likely some traders were looking to take some profits now in order to get ahead of potential negative headlines about the virus over the long weekend, said Sam Stovall, chief investment strategist at CFRA.
“We're seeing gravitation toward the more defensive sectors within the S&P, like utilities, real estate and consumer staples,” he said. Auto manufacturers, retailers and other companies that rely on consumer spending were among the decliners. Ford Motor and General Motors were down 1.9%. Target slid 1.6%.
Energy, industrial and financial sector stocks also fell. Marathon Oil slid 4.4%, J.B. Hunt Transportation Services fell 3.4% and American International Group dropped 4.6%. Technology companies led the gainers. Chipmaker Nvidia was a standout, jumping 7.1.% after it handily beat analysts’ profit forecasts for the fourth quarter.
The real estate and utilities sectors also held up well as government bond yields fell, making companies that pay higher dividends more attractive. Digital Realty Trust climbed 3.5% and American Water Works rose 1.6%.
Bond prices rose. The yield on the 10-year Treasury fell to 1.59% from 1.61% late Thursday. Investors continued to assess corporate earnings reports. Online travel company Expedia surged 11.7% and Sharpie maker Newell Brands rose 3.5% on solid earnings.
Canadian cannabis company Canopy Growth surged 16.1% after its latest quarterly results topped Wall Street's forecasts. KEEPING SCORE: The S&P 500 index was down 0.1% as of 3:29 p.m. Eastern time. The Dow Jones Industrial Average fell 95 points, or 0.3%, to 29,327. The Nasdaq composite slipped less than 0.1%. The Russell 2000 index of smaller company stocks dropped 0.6%. European and Asian markets ended mixed.
WEEKLY RECAP: A strong first half of the week is giving way to a muted finish as investors grow more cautious following updates on the new coronavirus outbreak. The S&P 500 is on track for a weekly gain of 1.3%, while the Nasdaq is aiming for a 2% gain. Both set records earlier in the week.
EARNINGS UPDATE: More than three quarters of S&P 500 companies have reported earnings and the results so far show solid growth. Companies are expected to report overall profit growth of just under 1% when all the reports are in, according to estimates from FactSet.
Several big companies are on deck to report results next week. Walmart will release its report on Tuesday and Deere will report on Friday. WEEK AHEAD: Investors are heading into a shortened week that is light on economic reports. Stock and bond markets are closed on Monday for the Presidents’ Day holiday. On Wednesday, the government will issue its report on producer prices, which measures inflation pressures before they reach consumers. Also, the Federal Reserve will release minutes from its January meeting.
Wall Street will also get some updates on the health of the housing industry. The government will release data on housing starts on Wednesday and the National Association of Realtors will release January home sales data on Friday.
AP Business Writer Damian J. Troise contributed.