U.S. stocks fell on Friday as Intel shares led the broader tech sector lower while investors weighed the potential for additional fiscal stimulus.
The Dow Jones Industrial Average slid 118 points, or 0.4%. The S&P 500 pulled back by 0.2% and the Nasdaq Composite declined by 0.6%.
Friday’s decline put the Dow and S&P 500 on track to snap a three-week winning streak and the Nasdaq was headed for its first weekly loss in five weeks. Week to date, the three market benchmarks were all down at least 1%.
Intel shares fell 11.3% following the release of mixed quarterly numbers for the chipmaker. The company’s earnings were in line with analyst expectations, but revenue from its data center business fell short of analyst estimates.
Those losses dragged down other tech-related names. Apple traded 1.2% lower. Amazon dipped 0.7%. Western Digital and Micron Technology were both down more than 3%.
It has been a tough week for the tech sector, falling more than 2%, amid concerns that a Democratic sweep on Nov. 3 could put pressure on the high-flying stock group.
“We see a Democratic sweep as having the most uncertainty and tail risk for [the] large-cap internet sector,” Bank of America analysts said in a note. Specifically, the analysts think a “Blue Wave” could lead to higher taxes and tougher regulation for tech companies.
Gilead Sciences gained 3.3% after the Food and Drug Administration approved the company’s drug, remdesivir, for use as a treatment against the coronavirus.
Stocks were coming off a solid session, as the major averages rose broadly on Thursday after House Speaker Nancy Pelosi signaled she and Treasury Secretary Steven Mnuchin were making progress in their fiscal stimulus negotiations.
However, President Donald Trump said Friday that he does not want the aid deal to bail out Democratic states, according to Reuters. Mnuchin also reportedly said there are still “significant differences” between the two sides.
Traders have been keeping an eye on Washington in recent weeks as they gauge the prospects for new coronavirus aid to be pushed through. Several market experts and economists, including Federal Reserve Chairman Jerome Powell, think it is imperative that lawmakers reach a deal on another stimulus package.
“Governmental powers are still trying to put together another economic relief package,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “However, despite the July expiration of unemployment benefits provided by the CARES Act, here, two-and-a-half months later, U.S. economic momentum is remarkably healthy.”
Banks were a bright spot in Friday’s downbeat session as a climb in Treasury yields gave the group a boost. Citigroup and JPMorgan Chase were up 0.5% and 0.7%, respectively. Bank of America advanced 0.2%.
— CNBC’s Yun Li contributed reporting.
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