S&P 500 notches 2nd straight weekly gain

NEW YORK» The S&P 500 index closed out an uneven week of trading on Wall Street with its second consecutive weekly gain, even though stock indexes ended lower Friday.

Technology companies led the slide, which erased the major U.S. indexes’ gains from the day before. Communication services, industrials and health care stocks also fell, outweighing gains in real estate companies, banks and elsewhere in the market.

Investors continued to focus on company earnings reports. They’re searching for a clearer picture on the impact that the trade war between the U.S. and China is having on corporate profits and the broader economy.

“To some extent, the bleeding’s stopped, but now you need to figure out how healthy the patient is,” said Willie Delwiche, an investment strategist at Baird. “Earnings help with that, and economic data that we receive over the next couple of months will help with that.”

The S&P 500 index fell 11.75 points, or 0.4%, to 2,986.20. The index is just 1.3% below its all-time high set in late July.

The Dow Jones industrial average dropped 255.68 points, or 1%, to 26,770.20. The Nasdaq lost 67.31 points, or 0.8%, to 8,089.54. The Russell 2000 index of smaller stocks gave up 6.36 points, or 0.4%, to 1,535.48.

All told, the S&P 500 ended the week with a gain of 0.5%. Last week, it notched a 0.6% gain.

Smaller stocks outpaced the broader market — a sign that investors are growing more confident. The Russell 2000 ended the week 1.6% higher after rising 0.8% last week.

Bond prices were little changed Friday. The yield on the 10-year Treasury held steady at 1.75%.

While trading turned choppy this week, investors mostly applauded companies’ results so far, including those from JPMorgan Chase, UnitedHealth Group and railroad operator Kansas City Southern.

That helped investors temporarily brush aside worries over the U.S.-China trade conflict. The early round of mostly good results could also help calm investors’ fears about another dismal forecast for earnings growth.

Analysts expect profit to contract by nearly 5% for companies within the S&P 500, according to FactSet. Still, forecasts for declines in the first and second quarters were tempered as reporting progressed and companies finished those earnings seasons with tiny contractions instead.

The bar for topping earnings forecasts in the third quarter has been lowered enough that most companies should beat it, Delwiche said.

“The question is what happens with 2020 earnings,” he said. “You still have robust 2020 numbers out there. Those likely need to come down.”

Uncertainty over the trade war and signs of a slowing global economy have roiled markets this year. Washington and Beijing reached a truce last week that kept their conflict from escalating further, but both sides still have many issues to work out before reaching a substantive deal.