By Tharuniyaa Lakshmi and Ragini Mathur
Oct 23 (Reuters) - The tech-heavy Nasdaq edged higher on Friday, helped by signs of stabilization in some tech stocks, while telecom shares tumbled on concerns that SpaceX's entry in the sector could heighten competition and threaten their market share.
For the week, the benchmark S&P 500 and the Nasdaq were on track for losses, while the blue-chip Dow remained slightly higher, supported by gains in defensive stocks.
The Philadelphia Semiconductor index rose 1.4%,
as some chip-related stocks gained on Friday. Nvidia was up 0.3%, while Micron Technology and Intel gained 2.5% and 3.8%, respectively.
AI-related shares swung sharply this month, first coming under pressure over CoreWeave's debt burden and the cost of financing AI investment.
On Thursday, the Nasdaq fell again, logging the biggest single-day drop in four months. The slide accelerated following Meta's nearly 8% decline after the company reported its first cash outflow in more than a decade amid concerns over its AI-related expenditures.
CoreWeave shares were down 2.3% on Friday.
"Investors are still trying to wrap their heads around the sheer size of this AI spend. The sheer size of these notional dollars is staggering, but we aren't at the point of the cycle yet that we've seen this return," said James O'Day, head of equities at Citizens Bank.
"The market's probably healthier than it feels."
The S&P 500 communication services index was down 0.6%, as AT&T, Verizon and T-Mobile fell between 1.3% and 5.6% after a report said SpaceX was in talks with cellular infrastructure companies about launching a nationwide wireless carrier program. SpaceX shares gained 2.2%.
US cell tower operators gained from this news, with Crown Castle up 11.11% and American Tower up 4.8%.
Market focus remains on the earnings season, with major companies such as Microsoft, Alphabet and Amazon reporting next week.
At 12:02 p.m. ET, the Dow Jones Industrial Average fell 502.87 points, or 0.95%, to 52,365.11, the S&P 500 lost 8.60 points, or 0.11%, to 7,654.90, and the Nasdaq Composite gained 80.59 points, or 0.32%, to 26,091.45.
Eight of 11 sectors on the S&P 500 declined, while the energy index rose to a record high, tracking gains in oil prices, and the information technology sector rose 0.9%.
Brent crude held near a more-than-five-month high amid Middle East supply concerns, adding to inflation worries ahead of the Federal Reserve's policy meeting next week. [O/R]
Markets expect the Fed to keep interest rates unchanged at its meeting next week, according to the CME's FedWatch Tool.
Data from the University of Michigan showed US consumer sentiment edged down near a record low in October, as rising prices because of the Middle East conflict soured households' views of the economy.
S&P 500's third-quarter profit growth is now forecast at 32.3%, up from 30.7% previously, according to LSEG data.
Among major movers, Comfort Systems was the biggest loser on the benchmark index, with a 7.5% fall, despite its third-quarter revenue and profit beating estimates.
Bloom Energy dropped 11.4% even after the energy firm raised its fiscal 2026 forecast.
SLB rose 7% after the oilfield services provider beat Wall Street estimates for third-quarter profit.
Declining issues outnumbered advancers by a 1.85-to-1 ratio on the NYSE and by a 1.54-to-1 ratio on the Nasdaq.
The S&P 500 posted 17 new 52-week highs and 6 new lows, while the Nasdaq Composite recorded 54 new highs and 276 new lows.
(Reporting by Tharuniyaa Lakshmi and Ragini Mathur in Bengaluru; Editing by Shinjini Ganguli)
