US stocks on Friday ended a holiday-shortened week solidly lower, following escalating tensions in the Middle East and US manufacturing activity that fell to its lowest level in about a decade. The S&P 500 and the Dow had their worst trading day in a month. The S&P 500 fell by 0.7% to end the trading day at 3,234.85. For the week, it lost 0.16%. US stocks tanked on Friday after US President Donald Trump approved a US airstrike in Baghdad that killed top Iranian general Qasem Soleimani. To cap it all, the Institute of Supply Management’s index of US manufacturing activity released on Friday hit its lowest level since the end
of the Great Recession in December. Thus, the Dow Jones Industrial Average shed by 0.8% on Friday, to close at 28,634.8. Still, week-on-week, it posted a slight gain of 0.05%. Friday was a surprise for investors after the market notched record highs in the previous session. More volatility is expected in the near term, but some experts remain optimistic since they see a major escalation as unlikely. According to analysts, geopolitical crises tend to create buying opportunities in the stock market as long as they don’t trigger
a recession. Meanwhile, the Nasdaq Composite closed 0.79% lower at 9,020.77 on Friday. For the week, the tech-heavy index was almost flat. In corporate news, General Motors reported 735,909 US sales on Friday for the fourth quarter, a 6.3% decline compared with the same quarter in 2018. Shares of General Motors fell by 2.8% on Friday. For the week, the stock lost 0.4%. According to Kurt McNeil, GM’s vice president in US sales operations, the company gets ready to launch its all-new full-size SUVs, so it looks forward to a solid year in 2020. Among gainers, Apple is still in a solid uptrend. Despite Friday’s pullback, the stock posted a weekly gain of 2.6%. Apple price target was raised to $350 from $280 by analysts, who said that the iPhone maker had a number of tailwinds in 2020 that could help it extend last year’s strong rally. The company gained 86% over the course of 2019, its best year in a decade. What will happen next? Marketplace observers will continue monitor any news on US-Iran relations. And while US markets recovered broadly on Monday, many of the usual indicators of rising market volatility are there. Together, they reveal that investors are unnerved by the Soleimani slaying and the events that have followed. Namely, that would include Iran’s official pullout of the nuclear deal, Iraq’s vote to expel US troops, and the escalating war of words from Trump and Iran’s supreme leader Ayatollah Ali Khamenei. For markets, the what-ifs are nearly as bad as the real thing, particularly in the short term.