US stocks on Friday inched lower as bond yields jumped, a shift that helped banks, but hurt companies that pay big dividends.
The US dollar fell after US President Donald Trump said China is manipulating its currency.
Companies including Microsoft Corp and Honeywell International Inc rose as investors were pleased with their quarterly reports, but General Electric Co stumbled.
Stocks wobbled all week as investors reacted to solid company results, as well as heightened trade tensions.
Over the prior two days, Trump criticized the US Federal Reserve for raising interest rates and China, saying that he was willing to put tariffs on all US imports from China and that China, the EU and others are harming the US by weakening their currencies and reducing interest rates.
Stocks were not 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,” Wells Fargo Investment Institute strategist Sameer Samana said.
Samana said he does not think that 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 is something investors will have to think about.
“We think the Fed has independence and they’ll continue to do the right thing,” Samana said. “This is one more item that just creates noise in markets.”
Investors have worried that the trade war and other disputes involving the US could slow down the global economy.
The S&P 500 on Friday dipped 2.66 points, or 0.1 percent, to 2,801.83, essentially flat from a close of 2,801.31 on July 13.
The Dow Jones Industrial Average on Friday lost 6.38 points to 25,058.12, rising 0.2 percent from 25,019.41 a week earlier..
The NASDAQ Composite on Friday gave up 5.10 points, or 0.1 percent, to close at 7,820.20, shedding 0.1 percent from a close of 7,825.98 on July 13.
The Russell 2000 index of smaller-company stocks on Friday fell 4.50 points, or 0.3 percent, to 1,696.81, rising 0.6 percent from 1,687.08 a week earlier.
Short-term bond yields inched higher. The yield on the two-year US Treasury note rose from 2.59 percent to 2.60 percent.
Long-term bond prices dropped. The yield on the 10-year Treasury note rose from 2.85 percent to 2.90 percent. That helped banks, because bond yields are used to set interest rates on many kinds of loans, including mortgages.
JPMorgan Chase & Co gained 1.3 percent to US$111.28 and Bank of America Corp picked up 1.6 percent to US$30.13.
Microsoft continued to set records after its fiscal fourth-quarter results topped Wall Street forecasts and its cloud-computing division continued to grow.
The company said it has been helped by its rivalry with Amazon.com Inc, because some retailers are reluctant to team up with Amazon on cloud-computing services while they compete with Amazon in sales.
Microsoft stock climbed 1.8 percent to US$106.27.
General Electric lost 4.4 percent to US$13.12 after it said its power business continued to struggle as revenue and orders decreased.
The firm, which has been selling and splitting off businesses, also cut its forecast for how much cash its businesses would generate.
Additional reporting by staff writer
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
Shin Kong Financial Holding Co (新光金控) yesterday said that its insurance unit would adjust its investment portfolio after being banned from buying new stocks a day earlier by the Financial Supervisory Commission (FSC). “We will research what we can do based on the commission’s specific instructions after we receive the regulator’s formal documents,” Shin Kong Financial spokesman Sunny Hsu (徐順鋆) told the Taipei Times by telephone. The commission on Tuesday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$941,722) for reckless investment, and demanded that the insurer reduce its overseas investment ratio from 43 percent to 39 percent. The fine would affect
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
EQUITIES TAIEX moves sharply higher The TAIEX moved sharply higher yesterday as buying focused on Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) after a strong showing by its American Depositary Receipts overnight. However, the gains were capped after the benchmark index breached 13,000 points and ran into technical hurdles, prompting investors to turn cautious, dealers said. At the end of the session, the TAIEX was up 131.11 points, or 1.02 percent, at 12,976.76. Turnover was NT$206.328 billion (US$7.04 billion), with foreign institutional investors buying a net NT$18.47 billion in shares, Taiwan Stock Exchange data showed. TSMC rose 2.92 percent to close at NT$458.