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Stocks slip but remain on track for another winning week

Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Friday, Jan. 11, 2019. Stocks are opening broadly lower on Wall Street, led by declines in banks and technology companies. (AP Photo/Richard Drew)

NEW YORK — Stocks slipped Friday, as falling oil prices dragged down energy companies, but the S&P 500 remained on track to close out its third straight winning week following a brutal stretch in December.

KEEPING SCORE: The S&P 500 was down 6 points, or 0.2 per cent, at 2,591, as of noon Eastern time. It had been down as much as 0.7 per cent earlier in the morning.

The Dow Jones Industrial Average fell 64, or 0.3 per cent, to 23,938, and the Nasdaq composite lost 27, or 0.4 per cent, to 6,958.

CRUDE CALL: Energy stocks in the S&P 500 fell 0.7 per cent for the largest loss among the 11 sectors that make up the index. ConocoPhillips, Diamondback Energy and Hess all fell more than 2 per cent.

Benchmark U.S. crude oil fell 63 cents, or 1.2 per cent, to $51.96 per barrel and is on pace to break a long winning streak. Oil has climbed for nine straight days, as it recovered a portion of sharp losses from prior months when worries flared about weakening demand and too much supply. If it remains down, it would be the first drop for oil in two weeks.

Brent crude, the international standard, sank 74 cents to $60.94.

PLAYER 2 HAS EXITED: Activision Blizzard plunged 9.2 per cent for the largest loss in the S&P 500 after it announced its eight-year partnership with game-developer Bungie is ending. Bungie will assume full publishing rights for the popular Destiny game franchise.

REVVED UP: General Motors jumped to the biggest gain in the S&P 500 after it gave a profit forecast for 2019 that topped analysts’ expectations. It also gave a better-than-expected forecast for 2018 profits, and shares jumped 8.4 per cent.

EARNINGS SEASON EVE: Companies across the country are gearing up to report how much profit they made in the last three months of 2018, and expectations are for a fifth straight quarter of growth topping 10 per cent.

Worries have been rising about how much of a slowdown will hit corporate profits in 2019, after last year’s numbers got a big one-time boost from lower tax rates.

While GM gave its encouraging forecast Friday, other big-name companies have recently offered a more discouraging picture of revenue trends due to slowing growth in China and elsewhere.

2019 RELIEF: The S&P 500 has been clawing back gains since running to the edge of what traders call a “bear market,” when it dropped 19.8 per cent between setting a record in September and a low on Christmas Eve. Stocks have climbed on soothing words from the Federal Reserve about the future path of interest rates, plus hopes that the U.S.-China trade dispute may ease. That’s helped to at least paper over worries about slowing growth for corporate earnings and the possibility of a looming recession.

The S&P 500 is on pace for a 2.4 per cent gain this week. If it lasts, it would be the third consecutive winning week for the index, its longest since August. Not only that, the last three weeks of gains have all been of at least 1.8 per cent. The last time that happened was in 2001.

US-CHINA TALKS: Talks between American and Chinese negotiators may have ended without significant breakthroughs, but traders are choosing to focus on the positives. The fact that talks lasted a day longer than planned, conciliatory statements from both sides and the possibility of higher-level talks in the near future are driving gains in Europe and Asia. In December, U.S. President Donald Trump and Chinese leader Xi Jinping agreed to a 90-day tariffs cease-fire, for negotiators to soothe tensions that have unsettled trade.

MARKETS ABROAD: In Asia, Japan’s Nikkei 225 index jumped 1 per cent, the Kospi in South Korea rose 0.6 per cent and the Hang Seng in Hong Kong gained 0.5 per cent. In Europe, France’s CAC 40 dropped 0.5 per cent, and Germany’s DAX lost 0.3 per cent. The FTSE 100 in London fell 0.4 per cent.

INTEREST RATES: The yield on the 10-year Treasury note fell to 2.69 per cent from 2.73 per cent late Thursday.

Stan Choe, The Associated Press