Stocks End Down on Concerns of Deteriorating US-China Relations Over Social-Media Apps

4:36PM ET 9/18/2020 MT Newswires
Stocks ended lower Friday amid worries about the deteriorating relationship between the US and China over social-media apps.

Investors also appeared cautious as the day marked a session of so-called quadruple witching, or the expiration of futures and options on stock indexes and single stocks for the quarter. The third calendar quarter ends on Sept. 30.

All 11 sectors of the Standard & Poor's 500 ended lower, and just four companies on the Dow Jones Industrial Average gained ground in the session.

Tech shares dropped 1.7% after the Trump administration said it would prohibit transactions relating to mobile apps WeChat and TikTok, effective Sunday. The administration has said the apps pose national security threats, which the makers of the apps deny. Tencent Music (TME) which is owned by WeChat's parent company, fell 1.2%. Oracle (ORCL) slipped 0.7% with questions over the viability of the software giant's potential deal with ByteDance for the TikTok's US operations.

Wedbush Securities analyst Daniel Ives said in a note Friday that a deal is still likely to be reached. "The broader worry is that if a deal is not reached over the next 48 hours with approval by the Chinese government around source code access and majority ownership, this shutdown move could be a Fort Sumter moment in the US/China cold tech war tensions with retaliation on the horizon," he said.

Apple (AAPL) fell 3.2%, and Microsoft (MSFT) retreated 1.2%.

Materials lost almost 1.8%, pulled lower by Westrock's (WRK) 3.8% fall and PPG's (PPG) 2.7% slide. Newmont (NEM) fell 2.4%.

Consumer discretionary shares fell 1.5%. Home Depot (HD) slid 1.7%, and Lowe's (LOW) fell 2.3% after Oppenheimer cut its ratings and price target on the home-improvement chains over concerns about post-pandemic sales growth. Norwegian Cruise Line Holdings (NCLH) lost 5.9%.

Energy lost 1.2%, as crude futures ended down. West Texas Intermediate fell less than 0.1% to $40.95 a barrel while international benchmark Brent shed 0.6% to $43.04 a barrel.

Exxon Mobil (XOM) lost 1.6%, and Occidental Petroleum (OXY) slid 1.8%.

Beyond Meat (BYND) dropped 5.2% after the alternative meat maker was downgraded to underweight from neutral by JP Morgan.

The Dow Jones Industrial Average fell almost 0.9% to close out the week slightly lower. The S&P 500 lost 1.1% to end the five-day period down 0.6%. The Nasdaq Composite ended about 1.1% lower to cap the week down 0.6%.