Stocks fell on Friday as Netflix led Big Tech shares lower while investors also grappled with weak overseas data, CNBC reports.
The Dow Jones Industrial Average traded 205 points lower, or 0.8%, led down by Boeing and Johnson & Johnson. The S&P 500 pulled back 0.5% while the Nasdaq Composite declined by 1.1%. Friday’s losses briefly wiped out the weekly gains for the Dow and Nasdaq.
Netflix shares dropped more than 6% and were the worst performers among “FANG” stocks. Facebook, meanwhile, slid 2.6% while Amazon fell 2%. Alphabet shares pulled back 0.9%.
Boeing and Johnson & Johnson dragged down the Dow. Boeing dropped 3% after Reuters reported that company instant messages suggest the aerospace giant misled regulators over the safety systems of the 737 Max. Johnson & Johnson slid 4.8% after the company recalled some baby powder upon finding traces of asbestos.
The major indexes entered the session on pace to post solid weekly gains amid a slew of better-than-expected quarterly earnings.
More than 70 S&P 500 companies have reported calendar third-quarter earnings this week. Of those companies, 81% have posted better-than-expected results, FactSet data shows.
Weak data from China also weighed down the market on Friday. Overnight, China posted its weakest growth in nearly three decades, as the U.S.-China trade war hit demand at home and abroad. The world’s second-largest economy grew 6% in the third quarter, less than expected, and its weakest pace of expansion in over 27 years.
Some of the companies posting stronger-than-forecast results this week include Bank of America, Netflix, J.P. Morgan Chase and Morgan Stanley. Coca-Cola continued that trend on Friday, rising more than 2%.
“There was so much nervousness coming into the earnings season about what they would bring, there is some happiness that this is pretty good,” said JJ Kinahan, chief market strategist at TD Ameritrade. “What they’ve really done is two things: Show the financials are incredibly resilient, and confirm that the consumer is ridiculously healthy.”
Optimism around Brexit also gave stocks a boost this week. The U.K. and European Union struck a long-awaited draft Brexit deal. British and EU officials reached the agreement after successive days of late-night talks and almost three years of tense discussions.
British Prime Minister Boris Johnson will now attempt to persuade U.K. lawmakers to back his agreement, ahead of what is expected to be a knife-edge vote on Saturday.
Sentiment around U.S.-China trade talks improved slightly this week, however. Larry Kudlow, director of the National Economic Council, told CNBC’s “Squawk Box” on Thursday there is “a lot of momentum” to get a deal done.
“There seems to be an underlying eagerness to see the SPX sustainably break above 3K and hit fresh highs,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “But in reality this feels like an attempt by people to wrap a fundamental justification around a bullish bias that is really being motivated by positioning pain, performance anxiety, and general ‘FOMO.’”
“In the very near-term, a 3K upside break might happen, but this will probably wind up being nothing more than a brief ‘head fake’ rally,” Crisafulli wrote.