Wall Street ends lower as Turkey woes hit banks

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 28, 2018. - REUTERS

NEW YORK: U.S. stocks slid on Friday as a deepening economic crisis in Turkey dragged on bank shares and triggered a move out of riskier assets.

The Dow and S&P 500 posted declines for the week following five straight weeks of gains, but the S&P 500 remains just 1.4 percent below its record high from Jan. 26.

A drop in technology shares added to the day's bearish tone. The S&P technology index <.SPLRCT> fell 0.8 percent, with Intel down 2.6 percent after Goldman Sachs downgraded the stock to "sell."

Microchip Technology shares fell 10.9 percent after a disappointing second-quarter revenue forecast.

A slump in the Turkish lira worsened after U.S. President Donald Trump doubled tariffs on steel and aluminum imported from the country.

Investors fled to safe-haven assets, pushing the dollar <.DXY> higher and weighing on U.S. bond yields .

"It was a classic risk-off move," said Quincy Krosby, chief market strategist at Prudential Financial in New Jersey. "You worry about the collateral damage. You worry about the effects on Europe. You have banks losing because the 10-year U.S. Treasury (yield) came down."

The S&P financial index <.SPSY> fell 1.2 percent, among the biggest drags on the S&P 500.

The Dow Jones Industrial Average fell 196.09 points, or 0.77 percent, to 25,313.14, the S&P 500 lost 20.3 points, or 0.71 percent, to 2,833.28 and the Nasdaq Composite dropped 52.67 points, or 0.67 percent, to 7,839.11.

For the week, the Dow fell 0.6 percent and the S&P 500 dipped 0.3 percent. The Nasdaq gained 0.3 percent for the week after strong gains in some technology shares.

Citigroup , the most global of the major U.S. banks, fell 2.4 percent. JPMorgan , Wells Fargo and Bank of America were also lower.

"Any time that there's any movement in currencies, financials tend to reap the contagion risks," said Jamie Cox, managing partner for Harris Financial Group in Richmond, Virginia.

Shares of trade-sensitive companies also declined, including Boeing , 3M and Caterpillar , which were all down at least 1 percent.

Tesla shares ended up 0.9 percent. The number of Tesla shares sold short rebounded and are now higher than before Chief Executive Elon Musk on Tuesday proposed taking the electric car maker private, according to data from financial technology and analytics firm S3 Partners.

Data on Friday showed U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures.

Declining issues outnumbered advancing ones on the NYSE by a 2.10-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 87 new highs and 102 new lows.

About 6.7 billion shares changing hands on U.S. exchanges. That compares with the 6.4 billion-share daily average for the past 20 trading days, according to Thomson Reuters data. - Reuter