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U.S. stocks ended lower on Friday to close a volatile trading week as inflation expectations escalated, while investors digested a batch of quarterly reports as the earnings season got underway. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 1.3% or 403.89 points to finish at 29,634.83 points, after rising as much as 390 points at its trading high.
The S&P 500 slipped 2.4% or 86.84 points to end at 3,583.07 points. Energy, consumer discretionary, materials and tech stocks were the biggest losers.
The Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) each lost 3.7%. The Materials Select Sector SPDR (XLB) fell 3.4%, while the Technology Select Sector SPDR (XLK) declined 2.8%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq fell 3.1% or 327.76 points to close at 10,321.39 points, recording its lowest closing value since Jul 2, 2020
The fear-gauge CBOE Volatility Index (VIX) was up 0.25% to 32.02. Decliners outnumbered advancers on the NYSE by a 4.20-to-1 ratio. On Nasdaq, a 2.87-to-1 ratio favored declining issues. A total of 10.88 billion shares were traded on Friday, lower than the last 20-session average of 11.48 billion.
Inflation Expectations Grow Unsettling Markets
Wall Street gave up early gains on Friday to fall to session lows after a consumer sentiment survey from the University of Michigan showed that inflation expectations over the next year rose to 5.1% from September’s one-year low of 4.7%. The survey also showed that inflation expectations over the next five years climbed to 2.9% from 2.7% in September.
The Fed is likely to closely watch this index. Inflation worries have already been worrying investors although markets made a dramatic turnaround on Thursday. The positive sentiment helped markets open in the green on Friday. However, fresh data from the University of Michigan once again dented investors’ confidence, leading markets to give way to losses in the latter half of Friday’s trading session.
Fed’s stance to aggressively hike interest rates to combat surging inflation has already been taking a toll on markets. Investors are now reeling under fears of the economy slipping into a deep recession owing to this. Friday’s data on expectations for inflation saw the tech-heavy Nasdaq leading the declines. Growth companies are the most sensitive to interest rate hikes and big tech companies ended up as one of the major losers on Friday.
Other big tech stocks also declined on Friday as bond yields rose. The 10-year Treasury yield crossed more than 4% for the second time in two days, as investors weighed on expectations for inflation making a steep rise. Shares of Salesforce, Inc. (CRM - Free Report) and Microsoft Corporation (MSFT - Free Report) declined 2.2% and 2.4%, respectively.
Also, stocks took a beating on Friday after the consumer-price index report on Thursday showed that inflation came in hotter than expected in September. Stocks initially took a hit on Thursday but made a historic comeback after investors shrugged off worries of the Fed continuing with its aggressive interest rate hike policy.
Earnings Season Gets Underway
The third-quarter earnings season also got underway this week. A batch of big banks reported quarterly results on Friday. Although several of them reported impressive quarterly results, investors’ sentiment remained low.
Shares of U.S. Bancorp (USB - Free Report) jumped 3.4% after it reported quarterly earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.17 per share.
Economic Data
In other major economic data released on Friday, retail sales came in flat in September, down from a revised 0.4% rise in August, the Commerce Department said. Excluding auto and fuel sales, retail sales increased 0.3%.
Weekly Roundup
It was a volatile week of trading that saw stocks making wild moves, particularly on Thursday. For the week, the Dow ended 1.2% higher. However, the S&P 500 and Nasdaq ended the week down 1.6% and 3.1%, respectively.
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Stock Market News for Oct 17, 2022
U.S. stocks ended lower on Friday to close a volatile trading week as inflation expectations escalated, while investors digested a batch of quarterly reports as the earnings season got underway. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 1.3% or 403.89 points to finish at 29,634.83 points, after rising as much as 390 points at its trading high.
The S&P 500 slipped 2.4% or 86.84 points to end at 3,583.07 points. Energy, consumer discretionary, materials and tech stocks were the biggest losers.
The Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) each lost 3.7%. The Materials Select Sector SPDR (XLB) fell 3.4%, while the Technology Select Sector SPDR (XLK) declined 2.8%. All the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq fell 3.1% or 327.76 points to close at 10,321.39 points, recording its lowest closing value since Jul 2, 2020
The fear-gauge CBOE Volatility Index (VIX) was up 0.25% to 32.02. Decliners outnumbered advancers on the NYSE by a 4.20-to-1 ratio. On Nasdaq, a 2.87-to-1 ratio favored declining issues. A total of 10.88 billion shares were traded on Friday, lower than the last 20-session average of 11.48 billion.
Inflation Expectations Grow Unsettling Markets
Wall Street gave up early gains on Friday to fall to session lows after a consumer sentiment survey from the University of Michigan showed that inflation expectations over the next year rose to 5.1% from September’s one-year low of 4.7%. The survey also showed that inflation expectations over the next five years climbed to 2.9% from 2.7% in September.
The Fed is likely to closely watch this index. Inflation worries have already been worrying investors although markets made a dramatic turnaround on Thursday. The positive sentiment helped markets open in the green on Friday. However, fresh data from the University of Michigan once again dented investors’ confidence, leading markets to give way to losses in the latter half of Friday’s trading session.
Fed’s stance to aggressively hike interest rates to combat surging inflation has already been taking a toll on markets. Investors are now reeling under fears of the economy slipping into a deep recession owing to this. Friday’s data on expectations for inflation saw the tech-heavy Nasdaq leading the declines. Growth companies are the most sensitive to interest rate hikes and big tech companies ended up as one of the major losers on Friday.
Shares of Meta Platforms, Inc. (META - Free Report) fell 2.7%, while Apple Inc. (AAPL - Free Report) declined 3.2%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Other big tech stocks also declined on Friday as bond yields rose. The 10-year Treasury yield crossed more than 4% for the second time in two days, as investors weighed on expectations for inflation making a steep rise. Shares of Salesforce, Inc. (CRM - Free Report) and Microsoft Corporation (MSFT - Free Report) declined 2.2% and 2.4%, respectively.
Also, stocks took a beating on Friday after the consumer-price index report on Thursday showed that inflation came in hotter than expected in September. Stocks initially took a hit on Thursday but made a historic comeback after investors shrugged off worries of the Fed continuing with its aggressive interest rate hike policy.
Earnings Season Gets Underway
The third-quarter earnings season also got underway this week. A batch of big banks reported quarterly results on Friday. Although several of them reported impressive quarterly results, investors’ sentiment remained low.
Shares of U.S. Bancorp (USB - Free Report) jumped 3.4% after it reported quarterly earnings of $1.18 per share, surpassing the Zacks Consensus Estimate of $1.17 per share.
Economic Data
In other major economic data released on Friday, retail sales came in flat in September, down from a revised 0.4% rise in August, the Commerce Department said. Excluding auto and fuel sales, retail sales increased 0.3%.
Weekly Roundup
It was a volatile week of trading that saw stocks making wild moves, particularly on Thursday. For the week, the Dow ended 1.2% higher. However, the S&P 500 and Nasdaq ended the week down 1.6% and 3.1%, respectively.