NEW YORK (TheStreet) -- U.S. stocks looked to be settling in the red Friday, poised to rack up a third week of losses following a choppy trading session. The chip sector was falling sharply amid global growth concerns but was offset somewhat by gains in consumer staples.
The Dow Jones Industrial AverageI:DJI fell 0.34% at last check. The S&P 500I:GSPC surrendered 0.74%. Widespread jitters about a cooling Chinese economy and a questionable economic recovery in Europe coming just as U.S. quantitative easing nears its end has brought the S&P down by nearly 2% so far this week. The index is on track for a third straight weekly decline.
The NasdaqI:IXIC shed 1.92% as the PHLX Semiconductor Index (SOX) tumbled 6.58%. The semiconductor sector tanked following a revenue miss on Thursday from Microchip Tech (MCHP) - Get Report . The company's guidance indicated a potential industry correction after a slowdown in sales in China during the traditionally strong September quarter. Shares were dropping 11.8%. Chip giant Intel (INTC) - Get Report slumped 4.9%.
"We expect volatility to remain elevated throughout October, and if the history of past 'growth scares' is a guide, further S&P 500 weakness will result," said Julian Emanuel, executive director of U.S. equity and derivatives strategy at UBS.
Emanuel suggested using the additional weakness to buy stocks expected to outperform in a continued strong U.S. dollar environment, particularly bank stocks.
The strategist is anticipating relief rallies later in the third-quarter earnings season to move shares back toward his 2014 year-end S&P 500 price target of 1,950.
Chip suppliers were seeing more pain after Juniper (JNPR) - Get Report and Procera (PKT) issued third-quarter warnings -- the latest bad earnings news for an industry that has seen plenty due to soft wireline capital expenditures. Juniper was off 8.5% while Procera dropped 33.16%. Analysts were defending Juniper, arguing that the bad news has been priced in and that telecom capex is likely to improve in 2015. Bulls have argued that Web and mobile traffic growth as well as software-defined networking and network functions virtualization investments will ultimately boost capex in spite of industry-service revenue pressures.
The Labor Department reported Friday that U.S. import prices fell 0.5% in September vs. the 0.7% decline expected by economists. The latest report, the third straight negative reading, demonstrated that inflationary pressures were falling amid continued evidence of a slowing global economy and an appreciating U.S. dollar.
-- By Andrea Tse in New York