US stocks end higher heading into holiday weekend but down for week

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Mounting concerns US-China trade tensions will last longer than expected

Layfield Report CEO John Layfield and TJM Investments Senior Vice President of Derivatives Scott Shellady on U.S. trade tensions with China and its impact on the U.S. markets.

U.S. stocks ended on a firmer note on low volume Friday, ahead of a long holiday weekend in both the U.S. and U.K., but ended lower for the week as the lack of progress in U.S.-China trade talks increased concern about global economic growth.

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The Dow Jones Industrial Average ended lower for the 5th week in a row, the longest losing streak in about eight years, while the benchmark S&P 500 index and the Nasdaq Composite closed down for a third week.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES26380.92+178.19+0.68%
SP500S&P 5002924.43+23.92+0.82%
I:COMPNASDAQ COMPOSITE INDEX8020.20785+71.65+0.90%

Fears over a prolonged trade war subsided a little after President Trump said he plans to meet with China’s Xi Jinping at a G-20 summit next month in Japan, and also after he suggested overnight that Chinese technology company Huawei may be included in any final trade deal. Earlier this week the White House announced plans to ban the company from using U.S. technology.

In the U.K., as expected, British Prime Minister Theresa May said she plans to resign as of June 7. Investors hope May's resignation may unblock the political stalemate over Brexit, though some analysts warn it could simply mean another delay to the EU departure.

In economic news,  business investment continued to weaken in the face of the trade war with China. Core capital-goods orders, which exclude volatile aircraft and auto orders, declined 0.9 percent in April, the first fall in four months. The yearly pace of business investment growth slowed in April to 1.3 percent from 3.8 percent, the smallest 12-month increase since January 2017, according to the U.S. Commerce Department.

TickerSecurityLastChange%Chg
QCOMQUALCOMM INC.76.70+0.63+0.83%
AVGOBROADCOM LIMITED287.50+7.13+2.54%
AAPLAPPLE INC.212.64+2.28+1.08%
FLFOOT LOCKER39.76+0.55+1.40%
TSLATESLA INC.220.83-5.03-2.23%

Technology and energy stocks were the worst-performing sectors for the week, thanks to the trade war disrupting global supply lines and a sharp fall in crude oil prices.

Qualcomm fell 17 percent for the week and Broadcom lost 10 percent.

Apple shares also contributed to the tech sector losses, with analysts concerned over the company’s exposure to China, leaving the stock down nearly 5 percent for the week.

“The growing worries around a US/China elongated trade battle and its implications on the tech space are heavily weighing on the minds of both investors and the companies themselves caught in the cross hairs,” Dan Ives, analyst at Wedbush Securities, wrote in a note to clients. “

Shares of Footlocker dropped after reporting same-store sales growth of 4.6 percent, missing analyst expectations. Tesla's stock was steady after CEO Elon Musk, in a memo to employees that leaked, suggested deliveries in the current quarter could exceed estimates.

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Recent declines in U.S. stocks have sent more money into the bond market. The yield on the 10-year Treasury dropped to 2.31 percent this week, the lowest level in more than a year. In turn, U.S. mortage rates are falling. A 30-year fixed rate mortgage is now hovering around 4.09 percent, as tracked by Freddie Mac.

West Texas Intermediate crude oil for July delivery ended slightly higher around $58.65 a barrel on the New York Mercantile Exchange but crude oil prices fell nearly 8 percent this week, the biggest weekly fall of the year, on concern the trade war will slow demand.

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