The S&P 500 and Nasdaq have closed lower as disappointing quarterly reports from Snap Inc and Intel Corp put pressure on the communications and technology sectors and investors turned skittish as Federal Reserve chair Jerome Powell discussed stimulus tapering.
The Dow managed to end Friday with a record closing high for the first time since August 16, but all three indices had lost ground in morning trading while Powell was speaking but went on to pare losses in a choppy session.
Powell said the US central bank was “on track” to begin reducing its purchases of assets.
Sean Sun, portfolio manager at Thornburg Investment Management in Santa Fe, New Mexico said Powell “didn’t appear incrementally more hawkish”.
But Sun said investors were “really anxious” about weaker than expected earnings at Snap, which attributed some weakness in its advertising business to global supply-chain disruptions and labor shortages that caused brands to pull back on their advertising spending.
Snap shares fell more than 25 per cent and its report caused shareholders to exit bigger advertising dependent communications companies such as Facebook Inc and Twitter Inc, which both closed down about five per cent.
As a result the S&P’s communications services index was the biggest drag on the benchmark index.
Intel shares tumbled almost 12 per cent after the computer chip maker missed third-quarter sales expectations, while its chief executive officer pointed to shortages of chips holding back sales of its flagship processors.
The Dow Jones Industrial Average rose 73.94 points, or 0.21 per cent, to 35,677.02, the S&P 500 lost 4.88 points, or 0.11 per cent, to 4,544.9 and the Nasdaq Composite dropped 125.50 points, or 0.82 per cent, to 15,090.20.
Still, all three indices notched a third straight week of gains for the first time since early July, with the S&P adding 1.6 per cent for the week while the Dow climbed 1.1 per cent and the Nasdaq advanced by 1.3 per cent.
Among the S&P’s major sectors on Friday, consumer discretionary was a drag as Amazon.com Inc fell and Intel helped push down the high-profile technology index.
The financial sector was helped, however, by strong gains in American Express Co, which rose 5.4 per cent after it beat profit estimates for the fourth straight quarter.
Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.30-to-1 ratio favored decliners.
The S&P 500 posted 88 new 52-week highs and no new lows; the Nasdaq Composite recorded 142 new highs and 137 new lows.
On US exchanges 11.03 billion shares changed hands compared with the 10.38 billion moving average for the last 20 seconds.