JWN Nordstrom Inc

By Ellie Ismailidou and Sara Sjolin, MarketWatch

Stocks posted daily loss weighed by drop in oil prices

U.S. stocks finished little changed on Friday, but the Dow and the S&P 500 managed to log their best weekly gains since November, closing the curtain on a bumpy stretch of trading on Wall Street.

A rally in the technology and consumer discretionary sectors eased a sharp selloff in the materials sector fueled by the drop in oil prices, while a reading on U.S. consumer inflation came in above economists' expectations.

The S&P 500 trimmed early losses to finish less than a point lower at 1,917.78. The materials sector fell the most, down 1.1%, while the consumer-discretionary sector led gainers, up 0.3%, followed by tech, up 0.2%. The index booked a 2.8% weekly gain, the largest weekly advance since Nov. 20.

The Dow Jones Industrial Average pared a 110-point drop to close 21.44 points, or 0.1%, lower at 16,391.99. Home Depot (HD) led the Dow gainers, up 1.4%, while Intel Corporation (INTC) led losses, down 2.4%. The blue-chip gauge logged a 2.6% weekly gain, the largest weekly gain since Nov. 20.

Bucking the down trend, the Nasdaq Composite trimmed earlier gains but still closed up 16.89 points, or 0.4%, at 4,504.43, posting a 3.9% weekly gain, the largest since mid July.

The main indexes logged the bulk of their gains during a three-day rally earlier this week that was their first three-day winning streak this year.

Friday's moves mean "equities are going into pause mode" until investors get more clarity on whether oil prices are stabilizing, on the Federal Reserve's plans for interest rates, and on the outlook for first-quarter earnings, said Terry Sandven, chief equities strategist at U.S. Bank Wealth Management.

Read:This one-two-three punch could drop stocks 30% in 2016 (http://www.marketwatch.com/story/this-one-two-three-punch-could-drop-stocks-30-in-2016-2016-02-19)

But a fresh slide in crude-oil prices (http://www.marketwatch.com/story/record-high-us-crude-stockpiles-weigh-on-oil-prices-2016-02-19), after data showed Thursday that U.S. oil inventories have risen again and Saudi Arabia ruled out a production cut, continued to weigh on energy stocks. Brent slid 3.7%.

Energy-related plays were among the biggest decliners on the Dow industrials, including Caterpillar Inc. (CAT), down 1% and Chevron Corporation (CVX)(CVX) down 0.3%.

Focus on inflation: The consumer-price index was flat last month (http://www.marketwatch.com/story/consumer-inflation-flat-in-january-2016-02-19), the government said Friday. Excluding volatile food and energy prices, so-called core consumer prices jumped 0.3%, the biggest gain since August 2011, while year-over-year, core prices rose 2.2%.

"Goods deflation is being completely offset by services inflation and this constant talk that we are in a global deflationary spiral is nonsense," said Peter Boockvar, chief market analyst at The Lindsey Group, in emailed comments after the release.

The interpretation of inflation data is crucial, as Fed policy makers will rely on it to determine the timing of any further rate increases. St. Louis Fed President James Bullard expressed worries Thursday that inflation expectations have been trending lower (http://www.marketwatch.com/story/heres-why-feds-bullard-is-now-leery-of-more-interest-rate-increases-2016-02-18), hinting that at this pace it could take longer for the Fed to reach its 2% annual inflation target.

Read: Why Yellen, Fed may be heartened by CPI data (http://www.marketwatch.com/story/why-yellen-fed-may-be-heartened-by-cpi-data-2016-02-19)

Boockvar, on the other hand, pointed to the discrepancy between different inflation gauges.

The personal-consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, is estimated to remain about 0.7 percentage points lower than the CPI, and well below the Fed's 2% target. "This is a large enough difference that the Fed should finally explain," Boockvar added.

Read:College tuition is rising at slowest rate ever (http://www.marketwatch.com/story/college-tuition-rising-at-slowest-rate-ever-2016-02-19)

Also:Health-insurance costs rise by nearly 5% (http://www.marketwatch.com/story/health-insurance-costs-rise-by-nearly-5-latest-cpi-data-shows-2016-02-19)

Movers and shakers: Shares of Nordstrom Inc. (JWN) tumbled 6.7% after the company reported tepid holiday-quarter results (http://www.marketwatch.com/story/nordstrom-reports-tepid-holiday-quarter-results-2016-02-18-164855745). Standard & Poor's on Friday downgraded the company's rating by one notch to BBB-plus from A-minus.

Weight Watchers International Inc. (WTW) surged 18.3% after a study by the Indiana University School of Medicine showed that Weight Watchers could help prevent diabetes.

Shares of Applied Materials Inc. (AMAT) gained 7.1% after the maker of machinery used to produce computer chips reported earnings late Thursday that beat Wall Street's expectations (http://www.marketwatch.com/story/applied-materials-rallies-as-quarterly-earnings-beat-wall-streets-expectations-2016-02-18).

Qualcomm Inc. (QCOM) pared strong gains to end 0.7% higher after the maker of processors and modem chips for smartphones said late Thursday it has reached a new patent-licensing deal with Lenovo Group Ltd. (0992.HK).

TrueCar Inc. (TRUE) slumped 13%, after the car-shopping website late Thursday posted results and revenue outlook that came in below analyst expectations (http://www.marketwatch.com/story/truecars-results-outlook-miss-wall-street-view-2016-02-18).

Deere & Company (DE) lost 4.2% after the tractor manufacturer reported a drop in quarterly profit and revenue before the market opened on Friday.

Yahoo! Inc. (YHOO) shares gained 2.1% after the company said it has formed a special committee to explore its strategic alternatives (http://www.marketwatch.com/story/yahoo-forms-committee-to-explore-options-2016-02-19-81034936), while it continues to consider spinning off its nearly $40 billion of holdings in Alibaba Group Holding Ltd.

Other markets:Stocks in Asia (http://www.marketwatch.com/story/asian-markets-slip-after-week-of-recoveries-2016-02-18) ended mostly lower. However, the main indexes logged solid gains for the week.

European markets (http://www.marketwatch.com/story/european-stocks-waver-as-oil-prices-step-back-2016-02-19) ended lower, but booked the strongest weekly gains in more than a year. The U.K.'s FTSE 100 index fell 0.4% as Prime Minister David Cameron kicked off a second day of negotiations in Brussels over how to reset the country's relationship with the European Union. Thursday's talks stretched into the early hours of Friday morning (http://www.marketwatch.com/story/uk-talks-on-eu-run-late-into-the-night-as-leaders-dig-in-heels-2016-02-19) as some key differences among European leaders remained.

(END) Dow Jones Newswires

February 19, 2016 16:56 ET (21:56 GMT)

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