Stocks surged in early trading after better-than-expected reports from companies including Procter & Gamble, American Express and PayPal. Procter & Gamble, the world's largest consumer products maker, had its biggest rally in 10 years. But the gains for indexes faded after a report showed U.S. home sales fell for the sixth month in a row. That hurt smaller and more U.S.-focused companies.
The market settled back into its usual pattern from the last two weeks, as companies that depend on economic growth struggled and those with more "defensive" qualities such as high dividends did better, a sign investors are worried about a few threats to growth: rising interest rates, trade tensions between the U.S. and China, and this week, some sluggish reports about housing construction and sales.
"We don't see too many other yellow or red flags right now, but (housing is) certainly one of them," said Mona Mahajan, U.S. investment strategist for Allianz Global Investors. Mahajan said that company earnings aren't doing much for the stock market right now because investors know the next two quarters should be strong, and they're concerned that growth in 2019 will be worse than expected.
The S&P 500 index lost 1 point to 2,767.78. The Dow Jones Industrial Average gave up most of an early gain. It jumped as much as 229 points early on but finished 64.89 points higher, or 0.3 percent, at 25,444.34.
Tuesday was the best gain in six months for U.S. stocks, but the S&P 500 fell every other day this week and ended the week up just 0.02 percent. That was good enough to end a three-week run of losses, but most of the market's recent gains have been swiftly followed by declines.
The S&P 500 hasn't risen two days in a row since Sept. 20. It finished at a record high that day, which was the last in a three-day string of gains. The benchmark index is down 5.6 percent since then.
The Nasdaq composite sagged 36.11 points, or 0.5 percent, to 7,449.03. The Russell 2000 index of smaller-company stocks lost 18.71 points, or 1.2 percent, to 1,542.04. The Russell 2000 is at its lowest in almost six months as investors worry that the U.S. economy could slow and interest rates could rise, a bigger challenge for smaller companies.
Procter & Gamble, which makes Tide, Pampers and Gillette razors, soared 8.8 percent to $87.30 after reporting that sales of fabric and home care products rose in its latest quarter while beauty products revenue jumped 20 percent.
Other household goods companies also rose. Pepsi gained 2.2 percent to $110.29 and Coca-Cola added 1.6 percent to $46.33. Electric utility Duke Energy rose 1.8 percent to $82.75.
Aerospace and building components maker Honeywell posted a bigger profit than analysts expected, but said it is seeing more signs of inflation in its business as a result of the tariffs the U.S. and China have placed on imported goods. Honeywell slid 1.1 percent to $153.47. Industrial companies have skidded recently as investors worried about the results of those trade tensions.
Bond prices slipped. The yield on the 10-year Treasury note rose to 3.19 percent from 3.17 percent.
China said economic growth sank to a post-financial crisis low of 6.5 percent in the third quarter. Chinese finance officials launched a media blitz to shore up confidence in the country's sagging stock market. China's economy has gradually slowed for years, even before a trade dispute between Beijing and U.S. President Donald Trump led to higher tariffs. The Chinese government tightened controls on lending last year to rein in a debt boom, but that, too, has affected the economy.
Hong Kong's Hang Seng rose 0.4 percent Seoul's Kospi added 0.4 percent. Tokyo's Nikkei 225 shed 0.6 percent.
Germany's DAX lost 0.3 percent and France's CAC 40 sank 0.6 percent. London's FTSE 100 gained 0.3 percent and the FTSE MIB was little changed. Tensions between European Union officials and Italy's new government sent Italian stocks and government bond prices lower Thursday. Italian bond prices turned higher Friday and yields slipped.
Benchmark U.S. crude rose 0.7 percent to $69.12 per barrel in New York. Brent crude, used to price international oils, gained 0.6 percent to $79.78 a barrel in London.
Wholesale gasoline rose 1.2 percent to $1.91 a gallon. Heating oil inched up 0.3 percent to $2.30 a gallon. Natural gas added 1.6 percent to $3.25 per 1,000 cubic feet.
Gold dipped 0.1 percent to $1,228.70 an ounce. Silver rose 0.3 percent to $14.65 an ounce. Copper gained 1.1 percent to $2.78 a pound.
The dollar rose to 112.60 yen from 112.20 yen. The euro rose to $1.1510 from $1.1465.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
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