US stocks fall; S&P 500 heads for 2nd straight weekly loss

Technology companies led a broad slide in stocks on Wall Street Friday afternoon as investors worry about the potential for another escalation in the trade war between the U.S. and China.

The selling followed a report by Bloomberg saying that the Trump administration is considering ways to limit U.S. investors’ portfolio flows into China. The report cited unnamed persons familiar with the administration’s internal discussions.

The prospect of another ramp-up in the trade conflict dampened investors’ already cautious optimism that the world’s two biggest economies might make progress as their representatives resume negotiations next month. Uncertainty over the costly and long-running trade war has fueled volatility in the market and stoked worries that the impact of tariffs and other tactics employed by the countries against each other is hampering U.S. economic and corporate profit growth.

Technology stocks, which are particularly sensitive to swings in the trade conflict, accounted for much of the selling. Microsoft slid 1.4% and Adobe dropped 2.9%. Micron Technology led the sector’s slide after the chipmaker issued a weak profit forecast and a sales warning, citing the trade war.

Communications stocks also fell. Twitter lost 2.7% and Activision Blizzard fell 3.4%.

Financial stocks were the only gainers, led by Wells Fargo. The troubled bank rose after it named a new CEO.

The S&P 500 index was on track for its second straight weekly loss. Volatility from the ongoing U.S.-China trade conflict and soft economic data have been weighing on the market throughout the week.

Meanwhile, investors are preparing for the close of the third quarter and an upcoming round of corporate earnings reports.

KEEPING SCORE: The S&P 500 index was down 0.6% as of 2 p.m. Eastern time. The Dow Jones Industrial Average slid 85 points, or 0.3%, to 26,791. The Nasdaq, which is heavily weighted with technology stocks, dropped 1.2%. The Russell 2000 index of smaller companies was off 0.7%.

Major stock indexes in Europe moved broadly higher.

ROUGH WEEK: The market has been in a slump all week as investors pull back amid trade war worries, reports of sluggish economic growth and an impeachment inquiry into President Donald Trump.

The tech-heavy Nasdaq bore the brunt of the selling and is on track for a 2.3% loss this week, while the S&P 500 is headed for a 1.1% decline. It will mark second straight weekly loss for both major indexes.

Smaller company stocks had a particularly rough week. The Russell 2000 index is headed for a 2.3% loss.

CHIP DIP: Micron Technology sank 10.4% after the chipmaker gave investors a weak profit forecast for the fiscal first quarter and warned that the trade war could hurt sales. The company gets more than half its revenue from China. Huawei, a prime target for U.S. sales restrictions, is a key customer.

MUSICAL CEOS: Wells Fargo rose 4.1% after it named its third CEO in as many years as the bank attempts to put a series of scandals behind it. Charles Scharf, currently CEO of Bank of New York Mellon, will take over from C. Allen Parker.

The company has been involved in a series of scandals since 2016 with the uncovering of millions of fake checking accounts its employees opened to meet sales quotas.

LIFTOFF: LATAM Airlines surged 30.5% after Delta Air Lines invested $1.9 billion in the airline, which focuses on Latin American routes. The investment gives Delta a 20% stake in the company.

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AP Business Writer Damian J. Troise contributed.