Wall Street fell on Friday as negative headlines about Johnson & Johnson and Boeing Co, along with bleak economic data from China, soured investor risk appetite and offset generally positive corporate earnings.
All three major US stock averages ended the session in the red, but the S&P 500 and the NASDAQ Composite posted weekly gains. The blue-chip Dow Jones Industrial Average was nominally lower than last week’s close.
Boeing and Johnson & Johnson shares led both the S&P 500’s and the Dow’s declines.
Boeing dropped 6.8 percent after Reuters reported that text messages between two employees suggested the planemaker misled the US Federal Aviation Administration about the safety of its grounded 737 MAX aircraft.
Johnson & Johnson announced it would recall baby powder in the US after regulators found trace amounts of asbestos in a sample, sending its shares falling 6.2 percent.
Growth of China’s GDP slowed to its weakest pace in nearly 30 years as a bruising trade dispute with the US took its toll, stoking fears of slowdown contagion.
The IMF has lowered its forecast for global growth this year to 3 percent, which would mark the slowest expansion since the financial crisis.
“There’s no question that there’s signs out there that the economy is weakening,” said Peter Cardillo, chief market economist at Spartan Capital Securities LLC in New York.
The market weakness “has to do with [GDP] news out of China, Boeing and Johnson & Johnson,” Cardillo said, adding that “market sentiment in terms of earnings is positive.”
Third-quarter earnings season has hit full stride, with 73 companies in the S&P 500 having reported. Of those, 83.6 percent have come in above average estimates, according to Refinitiv data.
Still, analysts see S&P 500 earnings dropping by 3.1 percent compared with last year, which would mark the first contraction since the earnings recession that ended in the middle of 2016.
Schlumberger NV gained 1.3 percent after the oilfield services company posted its largest quarterly loss ever as a result of a US$12 billion charge as chief executive Olivier Le Peuch moved to shift focus toward software and services.
American Express Co reported better-than-expected third-quarter profit as consumers boosted their spending. Still, the credit card issuer’s shares dipped 2 percent.
Coca-Cola Co’s revenue beat expectations and an upbeat forecast gave its shares a 1.8 percent boost.
Kansas City Southern jumped 7.3 percent after the railroad operator also beat profit expectations, on increased petroleum shipments to Mexico.
Next week, market participants look forward to high-profile results from Procter & Gamble Co, United Parcel Service Inc, Caterpillar Inc, Boeing, Microsoft Corp, Ford Motor Co, 3M Co, Twitter Inc, Amazon.com Inc and others.
The Dow Jones Industrial Average on Friday fell 255.68 points, or 0.95 percent, to 26,770.2, the S&P 500 lost 11.75 points, or 0.39 percent, to 2,986.2 and the NASDAQ Composite dropped 67.31 points, or 0.83 percent, to 8,089.54.
For the week, the Dow lost 0.2 percent, the S&P rose 0.5 percent and NASDAQ added 0.4 percent.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 1.03-to-1 ratio; on NASDAQ, a 1.41-to-1 ratio favored decliners.
The S&P 500 posted 29 new 52-week highs and two new lows; the NASDAQ Composite recorded 51 new highs and 59 new lows.
Volume on US exchanges was 6.24 billion shares, compared with the 6.55 billion average over the past 20 trading days.
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