US Stocks Finish Mixed Friday          01/22 16:28

   Wall Street tapped the brakes on its recent record-setting rally Friday with 
a mixed finish for the major stock indexes, though the S&P 500 still ended the 
week with its third weekly gain in four.

   (AP) -- Wall Street tapped the brakes on its recent record-setting rally 
Friday with a mixed finish for the major stock indexes, though the S&P 500 
still ended the week with its third weekly gain in four.

   The benchmark index fell 0.3%, snapping a three-day winning streak, but 
notched a 1.9% gain for the week. The Nasdaq eked out another record high. So 
did the Russell 2000 index of smaller companies, which traders have been 
favoring amid expectations of stronger economic growth later this year.

   The uneven finish for U.S. stock indexes followed a slide in global markets 
that began in Asia amid worries about resurgent coronavirus cases in China and 
weak economic data from Europe. In the United States, disappointing earnings 
reports from IBM and some other companies gave cover for investors to sell and 
book profits after big recent gains.

   "The big picture is, it's still a pretty friendly environment for stocks," 
said David Lefkowitz, head of Americas equities at UBS Global Wealth 
Management. "The pandemic will wind down, you'll see a surge in corporate 
profits this year and the Fed made very clear they're not going to take the 
punch bowl away anytime soon."

   The S&P 500 slipped 11.60 points to 3,841.47. The index was coming off two 
straight all-time highs. The Dow Jones Industrial Average dropped 179.03 
points, or 0.6%, to 30,996.98. The Nasdaq inched up 12.15 points, or 0.1%, to 
13,543.06. The Russell 2000 added 27.34 points, or 1.3%, to 2,168.76.

   Investors weighed another batch of company earnings reports Friday. The big 
theme in the early part of this earnings season is that most companies are 
handily beating Wall Street's profits expectations for the last three months of 
2020, with banks and some other industries leading the way. About 13% of the 
companies in the S&P 500 have reported results so far.

   "Earnings have been spectacular," said David Lyon, global investment 
specialist at J.P. Morgan Private Bank.

   Seagate Technology fell 4.7% despite joining that cavalcade of companies 
reporting better earnings than analysts expected. It also gave a forecast for 
revenue and profit in the current quarter that matched or topped Wall Street's. 
Analysts said a lot of that optimism may have already been built into the 
stock's price.

   IBM dropped 9.9% for the market's sharpest loss after reporting weaker 
revenue for the last three months of 2020 than analysts had forecast. The tech 
giant's revenue has been mostly shrinking for years. IBM nevertheless also 
reported a higher-than-expected profit.

   Markets have been mostly rallying recently on hopes that COVID-19 vaccines 
will lead to a powerful economic recovery later this year as daily life gets 
closer to normal. Hopes are also high that Washington will deliver another dose 
of stimulus for the economy now that the White House and both houses of 
Congress are under single control of the Democrats.

   President Joe Biden has proposed a $1.9 trillion plan to send $1,400 to most 
Americans and deliver other stimulus for the economy. But his party holds only 
the slimmest possible majority in the Senate, raising doubts about how much can 
be approved. Several Republicans have already voiced opposition to parts of the 
plan.

   The coronavirus pandemic is also worsening and doing more damage to the 
economy by the day. In Europe, a survey of purchasing managers showed on Friday 
that activity in the manufacturing and services sectors shrank during January 
in the 19-country eurozone. The data suggests the eurozone's economy may 
contract again this quarter.

   In China, where the pandemic began in late 2019, the government has 
reimposed travel controls after outbreaks in Beijing and other cities. A spike 
in infections has authorities calling on the public to avoid travel during 
February's Lunar New Year holiday, normally the year's most important family 
event.

   The U.S. economy has also been taking hits recently, with reports showing 
weakness in the job market and falling confidence among shoppers. But the data 
has been mixed.

   One report on Friday showed the housing industry continues to be a bright 
spot for the economy. Sales of previously occupied homes were stronger last 
month than economists expected. A separate report from IHS Markit gave a 
preliminary reading on U.S. business activity for January that was also 
stronger than expected, indicating an acceleration in growth.

   One major underpinning for the market seems to have little chance of going 
away soon: massive support from the Federal Reserve. The central bank is 
holding short-term interest rates at a record low and making other moves in 
hopes of boosting markets and the economy.

   The yield on the 10-year Treasury note slipped to 1.08% from 1.09% late 
Thursday. It has been mostly climbing this month, up from roughly 0.90% at the 
start of the year, with expectations for increased government borrowing, 
economic growth and inflation.

   A big question on Wall Street is how much more it can climb before criticism 
blares even louder that stock prices have grown too expensive relative to 
corporate profits.