MARKET SNAPSHOT: U.S. Stocks Recover From Rout, But Remain On Track For Sharp Weekly Loss
By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica
Snap, Nvidia drop after results
U.S. stocks opened with tepid gains on Friday, as Wall Street attempted to claw back from a sharp decline in the previous session, underlining a downbeat week for assets perceived as risky amid ongoing geopolitical uncertainty.
The Dow Jones Industrial Average rose 22 points, or 0.1%, to 21,867, while the S&P 500 was up 3 points to 2,440, a rise of 0.1%. The Nasdaq Composite Index rose 10 points to 6,225, a rise of 0.2%.
On Thursday, the three major U.S. indexes logged their worst performances since mid-May in a session dogged by escalating tension between the U.S. and North Korea. Late in the session, U.S. President Donald Trump said perhaps his threat to unleash "fire and fury" on North Korea "maybe wasn't tough enough."
For the week, the Dow is on track for a decline of 0.9%, its biggest one-week drop since April. The S&P is looking at a drop of 1.4%, its worst week since March. The Nasdaq is on track for a weekly decline of 1.8%, its worst since June. Still, all three gauges are within 5 percentage points of record levels.
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Meanwhile, the Russell 2000 index of small-cap stocks looked poised for a weekly drop of 2.8%, its biggest one-week decline since February 2016. Both the Nasdaq and the Russell are set for their third straight weekly decline.
Wall Street's so-called "fear gauge," the CBOE Volatility Index , meanwhile, hit the highest levels since Election Day on Friday , after a spike on Thursday. But was retreating in recent trade.
"From a geopolitical perspective, we understand why the escalation in tensions will have shaken some of the complacency out of investors," said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Wealth Management. "And while risks remain elevated from a geopolitical perspective, valuations are not necessarily excessive, though full. But we're in a low inflationary environment, which can help valuations remain elevated for longer than they would otherwise."
In the latest economic data, the consumer-price index rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target.
Outside the political arena, declines in a pair of technology stocks and added to the cautious tone on the day.
Shares of Snapchat-parent Snap Inc.(>> Snap Inc) slid 12% a day after its earnings missed forecasts , and the social-messaging company disclosed that average ad prices fell in the second quarter.
Nvidia Corp.(>> NVIDIA Corporation) shares fell 5.5%, even after the chip maker posted upbeat earnings late Thursday. Some say expectations for its server-chip business were just too high . The stock has more than doubled over the past 12 months, gaining more than 160%.
Opinion: What to do with stocks if the U.S. and North Korea go to war
The indicated U.S. market moves reflect a selloff across global stock markets Friday. The Stoxx Europe 600 benchmark was down 1.1% , while Hong Kong's Hang Seng led the Asian losses with a drop of 2%.
An editorial in China's state-run Global Times (http://www.globaltimes.cn/content/1060791.shtml), published late Thursday local time, added to the pressure on Asian markets.
Titled "Reckless game over the Korean Peninsula runs risk of real war," the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S. is the first mover.
"If the U.S. and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so," the editorial's authors said.
On the Fed speaker list, Minneapolis Fed President Neel Kashkari is expected to speak in a question-and-answer session at the Independent Community Bankers of Minnesota Annual Convention at 11:30 a.m. Eastern.
Stock movers:Nordstrom Inc.(>> Nordstrom, Inc.) shares rose 0.7% after the retailer late Thursday posted earnings that beat expectations , along with a sales rise.
J.C. Penney Co.(>> J C Penney Company Inc) slumped 16% after it reported a wider-than-expected second-quarter loss .
Other markets: Oil prices were under pressure , with prices 0.7% lower after the International Energy Agency said oil supply rose for a third month as compliance with an OPEC output deal faltered.
Gold prices were modestly up, and headed for a strong weekly gain . The precious metal is often used as a safe-haven investment in times of economic uncertainty.