Financial-Markets                      07/18 15:39

   

   NEW YORK (AP) -- Wall Street closed its third winning week in the last four 
with a quiet finish on Friday.

   The S&P 500 edged down by a whisper, less than 0.1%, after setting its 
all-time high the day before. The Dow Jones Industrial Average fell 142 points, 
or 0.3%, and the Nasdaq composite edged up by less than 0.1% to add its own 
record.

   Norfolk Southern chugged 2.5% higher after an AP source said it's talking 
with Union Pacific about a merger to create the largest railroad in North 
America, one that would connect the East and West coasts. Any such deal, 
though, would likely face tough scrutiny from U.S. regulators. Union Pacific's 
stock fell 1.2%.

   The heaviest weight on the market, meanwhile, was Netflix, which fell 5.1% 
despite reporting a stronger-than-expected profit. Analysts said it wasn't a 
surprise given the stock had already soared 43% for the year so far coming into 
the day, six times more than the gain for the S&P 500.

   American Express likewise delivered a better-than-expected profit report, 
but its stock lost 2.3%. Analysts pointed to slowing growth in some underlying 
trends, such as the number of cards it issued.

   Exxon Mobil sank 3.5% and also tugged on the market. It had been challenging 
Chevron's $53 billion deal to buy Hess, but an arbitration ruling in Paris 
about Hess assets off Guyana's coast allowed the buyout to go through. Chevron 
fell 0.9% after losing an early gain.

   Stronger-than-expected profit reports for the spring did help several stocks 
rally. Charles Schwab climbed 2.9%, Regions Financial jumped 6.1% and Comerica 
added 4.6%.

   All told, the S&P 500 slipped 0.57 to 6,296.79 points. The Dow Jones 
Industrial Average dropped 142.30 to 44,342.19, and the Nasdaq composite rose 
10.01 to 20,895.66.

   In the bond market, Treasury yields eased after a report suggested U.S. 
consumers may be feeling less fearful about coming inflation. They're bracing 
for inflation of 4.4% in the year ahead, down from last month's projection of 
5%, according to preliminary results from a University of Michigan survey.

   That's important because expectations for high inflation can feed into 
behaviors that create a vicious cycle that keeps inflation high. Overall 
sentiment among consumers, meanwhile, was a hair better than economists 
expected but still well below its historical average.

   "Consumers are unlikely to regain their confidence in the economy unless 
they feel assured that inflation is unlikely to worsen, for example if trade 
policy stabilizes for the foreseeable future," according to Joanne Hsu, the 
survey's director.

   The yield on the 10-year Treasury sank to 4.42% from 4.47% late Thursday. 
The two-year Treasury yield, which more closely tracks expectations for what 
the Federal Reserve will do with its short-term rates, also dropped. It fell to 
3.87% from 3.91%.

   A top Fed official, Gov. Chris Waller, said late Thursday that the Fed 
should cut its overnight interest rate as soon as its next meeting in a couple 
weeks. That follows sharp criticism from President Donald Trump, who has been 
castigating the Fed for holding interest rates steady this year instead of 
cutting them, as it did late last year.

   Lower rates could give the economy a boost, and Trump has implied they could 
help the U.S. government save money on its debt payments, though that's 
uncertain. The interest rates Washington has to pay on its longer-term debt can 
depend more on what bond investors think than on what the Fed does, and they 
can even move in opposite directions.

   The chair of the Fed, meanwhile, has been insisting that he wants to see 
more data about how Trump's tariffs will affect the economy and inflation 
before the Fed makes its next move. The downside of lower interest rates is 
that they can give inflation more fuel, and prices may already be starting to 
feel the upward effects of tariffs.

   Traders on Wall Street think it's much more likely that the Fed will resume 
cutting interest rates in September, rather than later this month, according to 
data from CME Group.

   In stock markets abroad, indexes were mixed across Europe and Asia. Hong 
Kong's Hang Seng jumped 1.3%, but Tokyo's Nikkei 225 slipped 0.2% ahead of an 
election for the upper house of parliament on Sunday that could wipe out the 
ruling coalition's upper house majority.

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   This version corrects the change in the Hang Seng index in Hong Kong to 1.3%.

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   AP Writers Teresa Cerojano and Matt Ott contributed.

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