Stocks Edge Lower While Bonds Extend Losses

U.S. stocks finished mostly lower as benchmark Treasury yields climbed to the highest levels in a year, renewing concern that rising borrowing costs and price pressures could derail the economic recovery.

The S&P 500 Index turned negative in the final minutes of trading Friday, ending lower for the first week in three. Utilities and consumer staples led the declines, while the materials and energy sectors finished in the green. The tech-heavy Nasdaq 100 was weighed down by Microsoft Corp. and Facebook Inc.

“The two big things right now are waiting for stimulus and this idea of the reflation trade -- investors have a keen eye out for signs of inflation,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. “You see Treasury yields moving higher, that’s causing a bit of consternation in the markets.”

Corporate earnings reports had given investors something to think about on Friday other than the relentless rise in Treasury yields, which dominated discussion this week and fueled concern about the staying power of the New Year stock rally. Applied Materials Inc. climbed after a strong forecast for the current quarter helped by growing orders from chipmakers rushing to produce more supply.

Recent economic data are a reminder of the fragility of the growth backdrop, with a report Friday showing U.K. retail sales fell more than twice as fast as expected in January.

Meanwhile, the Stoxx Europe 600 index advanced for the first time in four days, while the euro strengthened after Germany’s manufacturing PMI climbed more than forecast in February. The British pound rallied above $1.40 for the first time since 2018.

Oil traded below $60 a barrel as wells slowly restarted in Texas after being hit by a big freeze. The White House said it would be willing to meet with Iran, potentially paving the way for more crude exports from the Persian Gulf nation.