U.S. stocks inched lower Friday as bond yields jumped, a shift that helped banks but hurt companies that pay big dividends. The dollar fell after President Donald Trump said China is manipulating its currency.
Companies including Microsoft and Honeywell rose as investors were pleased with their quarterly reports, but General Electric stumbled. Stocks wobbled all week as investors reacted to solid company results as well as heightened trade tensions. The S&P 500 index was virtually flat for the week while the Russell 2000 index, which is made up of smaller companies that do more business inside the U.S., rose 0.6 percent.
In the last two days Trump criticized the Federal Reserve for raising interest rates and said China, said he’s willing to put tariffs on all U.S. imports from China, and said China, the European Union and others are harming the U.S. by weakening their currencies and reducing interest rates. Stocks weren’t affected, but the dollar declined and short-term bond yields slipped, suggesting investors wondered if the Fed might raise interest rates more slowly.
“If there’s a toss-up between raising and not raising (rates), you wonder what role these types of comments might possibly play,” said Sameer Samana, a strategist for the Wells Fargo Investment Institute.
Samana said he doesn’t think the Fed will make big changes to its policies based on Trump’s comments, even if the president starts advocating more forcefully for lower rates. But it’s something investors will have to think about.
“We think the Fed has independence and they’ll continue to do the right thing,” he said. “This is one more item that just creates noise in markets.”
The S&P 500 index dipped 2.66 points, or 0.1 percent, to 2,801.83. The Dow Jones Industrial Average lost 6.38 points to 25,058.12. The Nasdaq composite gave up 5.10 points, or 0.1 percent, to 7,820.20. The Russell 2000 index of smaller-company stocks fell 4.50 points, or 0.3 percent, to 1,696.81.
This article provided by NewsEdge.