The Nasdaq has ended lower as mega-cap growth stocks came under pressure after Treasury yields pointed to higher interest rates and shares of ride-hailing firm Lyft plunged following a downbeat profit forecast.
Yields on the benchmark 10-year Treasury note rose to their highest in more than a month on Friday following an auction on Thursday of 30-year bonds that saw weak demand.
“Investors are wondering what the bond market is telling us that economic indicators are not telling us,” said Sam Stovall, chief investment strategist at CFRA Research.
“Higher bond yields are going to more adversely affect the higher growth technology companies.”
But a rally in energy stocks as oil prices climbed on Russia’s plans to cut crude supplies helped push up the Dow and the S&P 500.
The Dow Jones Industrial Average ended up 169.52 points, or 0.5 per cent, to 33,869.4, the S&P 500 gained 8.98 points, or 0.22 per cent, to 4,090.48 and the Nasdaq Composite dropped 71.46 points, or 0.61 per cent, to 11,718.12.
The Nasdaq posted its first weekly fall this year, down 2.41 per cent, while the S&P 500 ended the week down 1.11 per cent and the Dow Jones lost 0.17 per cent in a week dominated by hawkish commentary from US Federal Reserve officials and earnings reports from more than half of the S&P 500 constituents.
That comes after a stellar performance by stocks in January.
This month, however, strong jobs data and comments from Federal Reserve Chair Jerome Powell stoked worries about how much higher interest rates might need to climb.
“What has been going on for the last few days is that every other day there is a Fed governor going to talk hawkish,” said Kevin Rendino, chief executive of asset manager 180 Degree Capital.
The Russell 1000 Growth index which houses many large-cap growth names fell 0.33 per cent.
Lyft Inc plummeted 36.44 per cent as it lowered prices, raising concerns it was falling behind bigger rival Uber Technologies Inc.
Uber shares also dropped 4.43 per cent.
Most of the 11 major S&P 500 sectors edged higher.
The energy sector jumped 3.92 per cent as oil prices climbed on Russia’s plans to cut crude supplies, while the consumer discretionary sector fell 1.22 per cent.
More than half of the firms listed on the S&P 500 have reported earnings, with 69 per cent beating profit estimates for the quarter, according to Refinitiv data.
US consumer sentiment improved further in February month-on-month but households expected higher inflation to persist in the next 12 months, the University of Michigan’s preliminary February reading showed.
After US equities were rattled over the week by strong jobs data, investors are waiting for January consumer inflation data next week for clarity on the Fed’s rate-hike path.
Volume on US exchanges was 10.43 billion shares, compared with the 11.85 billion average for the full session in the past 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favoured decliners.
The S&P 500 posted 3 new 52-week highs and no new lows; the Nasdaq Composite recorded 36 new highs and 68 new lows.
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