Stocks trim losses as investors compartmentalize trade fears

|By:, SA News Editor

Stocks closed lower on worries that tit-for-tat tariffs between the U.S. and China could escalate into a full-blown trade war, but rebounded from steep early losses to finish down only modestly.

"The market has done a good job of whistling past the graveyard when it comes to trade policy," said B. Riley FBR chief market strategist Art Hogan. "The market has come back to think we'll probably get some sort of negotiation done."

"This is a long game, so it doesn't make sense to overreact one way or the other," said Craig Birk, executive VP of portfolio management at Personal Capital.

The 11 S&P 500 groups ended mixed with five gaining, led by consumer staples (+1.3%), telecom services (+1.2%) and utilities (+0.7%), while six sectors declined, with energy (-2.1%) lagging by a wide margin as crude oil prices tumbled.

For the week, the Dow slid 0.9%, the S&P finished flat and the Nasdaq jumped 1.3% after finishing Thursday at an all-time high.

WTI crude futures plunged 2.7% to $65.06/bbl ahead of next week's OPEC meeting, where oil producers are expected to raise their production targets in an effort to combat falling output from Venezuela and Iran.

U.S. Treasury prices settled higher, with the benchmark 10-year yield ending 2 bps lower at 2.92% while the two-year yield slipped 3 bps at 2.55%.

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