US close: Stocks cap worst week in over two years with further selling

Wall Street capped a bruising five-day stretch on Friday that saw it retreat almost 6%, its worst weekly performance in over two years, with further losses, despite better-than-expected readings on business investment and new home sales in the US.

Position-squaring going into the Easter-shortened week may have added to the selling pressure, even as traders mulled the potential implications and risks sparked by the latest round of global trade tensions and the outlook for central bank policy.

By the close of trading, the Dow Jones Industrials Average was down by 1.77% or 424.69 points to 23,533.20, alongside a drop of 2.10% or 55.43 points for the S&P 500 to 2,588.26 while the Nasdaq Composite fell 2.43% or 174.01 points to 6,992.67.

Selling pressure only built-up in the final two hours of trading, after the president signed a $1.3bn spending bill into law.

For the week, the Dow Industrials erased 5.7%, the S&P 500 lost 5.9% and the Nasdaq Composite just over 6.5%.

From a sector standpoint, and figuring prominently at the bottom of the leaderboard on Friday were Life Insurance (3.43%) and Banks (-3.39%).

Going the other way, a weaker dollar boosted Gold Mining (2.65%) and Mining (2.41%), with a solid read on durable goods orders in February lifting Defence (1.77%) and Aerospace&Defence (0.69%).

The US dollar spot index lost 0.47% to 89.44 - to trade just above its 52-week lows - alongside a one basis point dip in the yield on the benchmark 10-year US Treasury note.

Meanwhile, the KBW index of lenders' shares was down by 3.36% to close at 103.94, amid negative comments out of strategists at BoA-Merrill Lynch who in a research note sent to clients cautioned that "[the] pain trade still lower stocks, higher CNY, lower bond yields on peaking PMI/EPS […] financials, tech, EAFE most vulnerable."

On a related note perhaps, on Thursday Janus Henderson Group's Bill Gross said that the American and world economies were too leveraged to be able to withstand a Fed funds target rate of more than 2% in a world where inflation was running at 2%.

Trade tariffs, Geopolitics, and Technicals all in the spotlight

A day earlier, the Dow Jones index closed 2.9% lower, the S&P 500 dropped 2.5% and the Nasdaq 2.4% as equities experienced their biggest sell off since 8 February.

On Thursday, President Donald Trump signed off on 25% tariffs on $50bn-worth of Chinese imports in a bid to punish the People's Republic for intellectual property infringements, among other measures. It was met by a promise of retaliatory tariffs from Beijing.

Adding to the downbeat tone was the White House's latest personnel change, with national security adviser HR McMaster substituted by a controversial former US ambassador to the UN, well-known foreign policy hawk John Bolton.

To take note off in the background, the S&P 500's 200-day moving average stood at 2,597.8 as of Friday's close, although some market watchers were more interested in the 10,136.61 point level on the Dow Jones Transport index, the loss of which some technical analysts said would trigger a 'sell' signal.

Investors look past upbeat economic data

Unable to offset all of the above concerns, the Commerce Department reported that US durable goods orders jumped by 3.1% month-on-month in February (consensus: 1.6%), driven by demand for civilian and military aircraft and cars.

In other news, US new home sales dipped by 0.6% last month to reach an annualised pace of 618,000 (consensus: 620,000), albeit alongside upwards revisions to the data for January.

Speaking just after the market open in New York, Atlanta Fed chief Raphael Bostic said he would likely support more interest rate hikes in 2018.

On the corporate side of things, Pfizer was significantly weaker after GlaxoSmithKline said it's no longer interested in the company's consumer healthcare business. This came a day after Reckitt Benckiser said the same.

Elsewhere, Nike rallied after better-than-expected third-quarter numbers, managing to swim against the current to eke out a small gain.

Shares of grocery chain Kroger finished lower, following an early spike on the back of a report that it had entered into merger talks with Target.

Facebook shares failed to gain traction.

Dow Jones - Risers

Boeing Co. (BA) $321.00 0.43%
Nike Inc. (NKE) $64.67 0.33%
Chevron Corp. (CVX) $112.98 -0.63%
Procter & Gamble Co. (PG) $75.91 -0.65%
Exxon Mobil Corp. (XOM) $72.89 -0.83%
Coca-Cola Co. (KO) $42.33 -1.01%
American Express Co. (AXP) $90.45 -1.05%
Unitedhealth Group Inc. (UNH) $212.55 -1.24%
Verizon Communications Inc. (VZ) $46.29 -1.26%
McDonald's Corp. (MCD) $154.98 -1.31%

Dow Jones - Fallers

Dowdupont Inc. (DWDP) $63.08 -3.90%
3M Co. (MMM) $215.36 -3.50%
Pfizer Inc. (PFE) $34.49 -3.12%
Microsoft Corp. (MSFT) $87.18 -2.91%
Goldman Sachs Group Inc. (GS) $245.32 -2.91%
Intel Corp. (INTC) $49.36 -2.89%
JP Morgan Chase & Co. (JPM) $107.01 -2.67%
Visa Inc. (V) $117.00 -2.49%
Travelers Company Inc. (TRV) $134.90 -2.35%
Apple Inc. (AAPL) $164.94 -2.32%

S&P 500 - Risers

Newmont Mining Corp. (NEM) $38.76 3.06%
Tenet Healthcare Corp. (THC) $24.77 2.91%
Cintas Corp. (CTAS) $167.85 2.91%
Lockheed Martin Corp. (LMT) $336.31 2.80%
Raytheon Co. (RTN) $214.57 2.61%
Mattel Inc. (MAT) $13.23 2.56%
ConocoPhillips (COP) $57.74 2.19%
Northrop Grumman Corp. (NOC) $345.77 2.05%
Martin Marietta Mtrl (MLM) $205.68 1.97%
Vulcan Materials Co. (VMC) $115.64 1.76%

S&P 500 - Fallers

Western Digital Corp. (WDC) $92.34 -8.42%
Micron Technology Inc. (MU) $54.21 -7.99%
Applied Materials Inc. (AMAT) $55.38 -6.07%
Lam Research Corp. (LRCX) $202.63 -5.67%
Keycorp (KEY) $19.04 -4.90%
Morgan Stanley (MS) $52.07 -4.70%
Seagate Technology Plc (STX) $56.28 -4.67%
Bank of America Corp. (BAC) $29.17 -4.52%
Lincoln National Corp. (LNC) $70.36 -4.40%
Pitney Bowes Inc. (PBI) $11.32 -4.39%

Nasdaq 100 - Risers

Cintas Corp. (CTAS) $167.85 2.91%
Liberty Global plc Series A (LBTYA) $32.18 0.37%
Wynn Resorts Ltd. (WYNN) $175.88 0.19%
Vodafone Group Plc ADS (VOD) $27.41 0.18%
Shire Plc Ads (SHPG) $126.50 0.09%
Comcast Corp. (CMCSA) $33.17 -0.18%
Ross Stores Inc. (ROST) $74.84 -0.27%
Liberty Global plc Series C (LBTYK) $31.02 -0.35%
Express Scripts Holding Co (ESRX) $70.16 -0.44%
Broadcom Limited (AVGO) $242.48 -0.45%

Nasdaq 100 - Fallers

Western Digital Corp. (WDC) $92.34 -8.42%
Micron Technology Inc. (MU) $54.21 -7.99%
Applied Materials Inc. (AMAT) $55.38 -6.07%
Lam Research Corp. (LRCX) $202.63 -5.67%
Seagate Technology Plc (STX) $56.28 -4.67%
Biogen Inc (BIIB) $260.13 -4.33%
KLA-Tencor Corp. (KLAC) $108.18 -4.20%
JD.com, Inc. (JD) $40.87 -3.86%
Amgen Inc. (AMGN) $169.43 -3.78%
DENTSPLY Sirona Inc. (XRAY) $50.71 -3.70%