Stocks post losses for the week as chip names get hammered

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The S&P 500 and Dow ended higher on Friday but posted losses for the week as Nvidia and other chip names had a particulary rough day.

The S&P 500 (^GSPC) rose 0.22%, or 5.95 points, as of market close Friday. The Dow (^DJI) rose 0.49%, or 123.95 points, jumping after Trump suggested Friday afternoon that he was hopeful that the US and China could strike a deal on trade, if the agreement is reciprocal. However, the S&P 500 fell 1.6% for the week, and the Dow posted a weekly loss of more than 2%.

The Nasdaq (^IXIC) fell 0.15%, or 11.16 points Friday, and is down about 2.1% for the week. The index spent most of Friday in the red as steep losses from shares of chipmaker Nvidia pulled peer semiconductor stocks lower.

US crude oil prices advanced for the third day in a row but still ended the week lower by about 6%. Prices for U.S. crude (CL=F) settled at $56.46 on Friday, marking the commodity’s sixth consecutive week of declines.

‘Big Oil equities appear likely to remain in a holding pattern’

Part of the recent weakness in crude oil prices can be blamed on decelerating global growth expectations in 2019/2020,” Wells Fargo analysts wrote in a note Friday. “The biggest near-term wildcard in the economic outlook is the trade dispute between China in the US. A favorable resolution to this impasse would be positive for global GDP and oil prices, in our view.”

The analysts added that “Big Oil equities appear likely to remain in a holding pattern until the OPEC meeting concludes on December 6, 2018,” referring to the upcoming meeting in Vienna. “The important number to watch in the coming OPEC meeting is for cuts totaling or exceeding 1.1 mmbpd.”

Earlier this week, OPEC and its partners were reported to have been considering a proposal to cut oil output by 1.4 million barrels per day, a higher quantity than previously anticipated.

Broad declines in commodities are one another signal that a downturn in global growth may be spilling over to the US. This comes amid a flurry of other factors that could impact growth, including the specter of rising interest rates, increasing US debt and annual budget deficits and projections of decelerating earnings for US companies.

A trader keeps an eye on the numbers during the last half hour of trade on the floor of the New York Stock Exchange, Monday, July 16, 2007. (AP Photo/Mary Altaffer)

‘I think US markets really are at a crossroads’

“I think US markets really are at a crossroads,” said John Linehan, chief investment officer of equity at T. Rowe Price, during a briefing this week in New York. “There are very significant reasons to be confident about the market but some real reasons to see that there’s some risks that pose a very clear and present danger.”