Dow Snaps Eight-Week Winning Streak
By Marina Force and Corrie Driebusch
The Dow Jones Industrial Average slipped Friday, notching its first weekly decline since September.
Concerns over the prospects of a U.S. tax-overhaul plan interrupted a remarkable stretch of gains for stocks. The Dow Jones Industrial Average posted seven consecutive winning sessions prior to Thursday, when Wall Street closed in the red after Senate Republicans released a tax-reform proposal that delays cutting corporate rates until 2019. Stocks continued to fall Friday, snapping an eight-week winning streak for the Dow industrials, its longest in nearly four years.
On Friday, the Dow slipped 40 points, or 0.2%, to 23422. The S&P 500 fell 0.1%, while the Nasdaq Composite added less than 0.1%. All three posted weekly drops.
"Is this the beginning of the end? The last two days' selloff, I'm not concerned," said Kent Engelke, chief economic strategist at Capitol Securities Management. However, he added there could be more swings in the market if tax-code changes, particularly for corporations, fail to pass in the next several months.
"If we don't get it, I would be concerned about the market," he said, referring to a tax overhaul.
The Senate plan to overhaul the U.S. tax code differs significantly from the House GOP's in key areas such as the level of top individual tax rates and the timing of a corporate tax-rate cut. Differences among the two proposals caused some traders to question the ability of Republicans to get a bill through to the White House.
Still, some investors said not to read too much into the recent declines, as profit growth should continue to support stock prices.
"We remain pretty constructive on stocks overall. We think in the U.S. earnings are still pretty strong," said Jeremy Bryan, portfolio manager at Gradient Investments.
The Stoxx Europe 600 fell 0.4%, led by losses in the automotive sector. It ended the week down 1.9%, its biggest one-week decline since August.
Disappointing earnings dragged down European stocks. Italian aerospace firm Leonardo suffered a large share-price drop Friday, falling 22% after it reported its third-quarter net profit fell 46% and it lowered its outlook for the year.
Mining and financial services stocks bucked the downbeat trend to post gains, after companies including ArcelorMittal reported earnings that beat expectations.
In the bond market, yields on 10-year Treasurys rose for a third consecutive day to 2.397% from 2.333% Thursday, according to Tradeweb. Yields rise as prices fall.
Earlier, stock indexes in Asia ended mostly down.
Japan's Nikkei Stock Average led regional declines with a 0.8% fall as tech-heavy markets extended Thursday's losses, after technology giant Qualcomm signed significant but preliminary deals with three Chinese companies to supply components. The tie-ups fueled fears that other companies in the region that rely on the U.S. firm's patents to develop and make chips would be at a disadvantage.
Elsewhere in Asia, Korea's Kospi was down 0.3%, Hong Kong's Hang Seng ended up 0.1%, and Australia's S&P/ASX 200 was down 0.3%, after the benchmark reached its best levels since 2008 this week.
Kenan Machado and Corrie Driebusch contributed to this article.
Write to Corrie Driebusch at [email protected]