U.S. stocks end mixed; S&P 500 posts 3rd weekly gain

The S&P 500 notched its third straight weekly gain Friday, even as the major U.S. stock indexes ended the day mostly lower.

A slide in technology stocks, along with losses in consumerfocused and real estate companies, offset solid gains elsewhere in the market, including big Wall Street banks and industrial stocks.

Bond yields rose sharply after the government reported that Americans kept spending money in August, particularly on cars.

The S&P 500 index slipped 2.18 points, or 0.1%, to 3,007.39. With a gain of about 1% this week, the benchmark S&P 500 moved closer to its all-time high of 3,025.86 set July 26.

The Dow Jones industrial average posted its eighth straight gain, rising 37.07 points, or 0.1%, to 27,219.52.

The technology heavy Nasdaq fell 17.75 points, or 0.2%, to 8,176.71. The Russell 2000 index of smaller-company stocks gained 3.07 points, or 0.2%, to 1,578.14.

An easing of tensions in the trade war between the U.S. and China bolstered the market this week, renewing hope among investors that a new round of negotiations set to begin next month may yield some progress.

Investors are now looking ahead to next week, when the Federal Reserve is expected to announce another interest rate cut. The central bank lowered its benchmark interest rate in July by a quarter point, its first cut in a decade, in a bid to help maintain U.S. economic growth.

“When you have a run like we had, the market tends to pull back,” said Quincy Krosby, chief market strategist at Prudential Financial. “Going into the Fed meeting next week, there may be a little bit of caution.”

Smaller-company stocks were the big winners for the week as the Russell 2000 climbed 4.9%. The smaller, U.S.-focused companies in the Russell are seen as more insulated from the volatile swings in the U.S.-China trade war.

Investors’ renewed optimism on trade marks a stark contrast to the entire month of August, when both the U.S. and China made increasingly damaging retaliatory moves to escalate the dispute that has threatened to slow global economic growth and potentially prompt a recession.

“The palpable fear in the market during August has eased as the trade headlines have eased,” Krosby said. “But we also saw stimulus from the European Central Bank. The market applauded that and expects the Fed to cut rates.”

Central banks around the globe are trying to invigorate their economies at a time when growth is slowing. On Thursday, the European Central Bank approved a monetary stimulus package to try to rescue Europe’s economy in the face of slower growth and uncertainties caused by the U.S.-China trade conflict and Britain’s expected exit from the European Union.

The U.S. economy appears sturdier than Europe’s, and the Fed’s action is seen as a preemptive bid to help sustain a decade-long expansion.

Still, recent economic data has been mixed. On Friday, the Commerce Department’s retail sales report beat economists’ forecasts, but showed that consumers are becoming more cautious. The increase came from auto sales. Without those sales, spending was flat for the first time since February.

A steady rise in bond yields propelled bank stocks higher this week. The yield on the 10-year Treasury note is up more than 30 basis points from 1.55% late last week as investors grow more confident about economic growth amid easing trade war tensions. JPMorgan is up 6.8% and Bank of America gained 8.8% this week, far outpacing the broader market.

Bond yields rose sharply Friday following the retail sales report. The yield on the 10-year Treasury rose to 1.90% from 1.79% late Thursday.

That helped lift bank stocks, which rely on higher yields to set interest rates and make more money from loans. JPMorgan rose 2% and Citigroup rose 1.6%.

Benchmark crude oil fell 24 cents to settle at $54.85 a barrel. Brent crude oil, the international standard, dropped 16 cents to $60.22 a barrel.

Gold fell $7.80 to $1,490.90 per ounce, silver fell 60 cents to $17.44 per ounce and copper rose 6 cents to $2.68 per pound.