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Wall Street closed mostly higher on Friday, in a light trading day ahead of the Christmas weekend as recession fears continued to dampen investors’ spirit despite data showing signs of cooling inflation. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.5% or 176.44 points to finish at 33,203.93 points.
The S&P 500 advanced 0.6% or 22.43 points to end at 3,844.82 points. Energy and utility stocks were the biggest gainers.
The Energy Select Sector SPDR (XLE) gained 3.2%. The Utilities Select Sector SPDR (XLU) climbed 1%. All 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq rose 0.2% or 21.74 points to close at 10,497.86 points.
The fear-gauge CBOE Volatility Index (VIX) was down 5.01% to 20.87. Advancers outnumbered decliners on the NYSE by a 2.06-to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored advancing issues. A total of 7.75 billion shares were traded on Friday, lower than the last 20-session average of 11.41 billion.
Recession Fears Dent Investors' Confidence
Trading was in low volume on Friday ahead of the holiday weekend. Markets opened lower on Friday following the release of a series of fresh economic data, including the November personal consumption index (PCE) data, the Fed’s preferred measure of inflation. PCE for November increased a meager 0.1%, lower than the consensus estimate.
Also, the rate of inflation slowed year over year in November. Experts are of the opinion that the latest reading will not have much impact on the Fed’s plans of continuing with its aggressive rate hike policy.
Investors are worried about how long the Fed will continue with its rate-hike policy. Economists also believe that trading will continue to be volatile and stocks will remain under pressure until the Fed signals a cut in interest rates.
This has been dampening investors’ sentiments as they believe that the Fed’s rate-hike stance would push the economy into a recession. These fears have also somewhat dashed investors’ hopes of a year-end rally, resulting in massive losses in December.
U.S. consumer prices index, increased 0.1% in November after jumping 0.9% in October and also came in lower than economists’ expectations of an increase of 0.2%. On a year-over-year basis, it increased 4.7% in November after rising 5% in October.
Excluding the volatile food and energy components, the PCE price index rose 0.2% in November, after climbing 0.3% in the month earlier.
The PCE Price Index increased 0.1% in November, after climbing 0.4% in the month earlier. In the 12 months through November, PCE Price Index rose 5.5% after increasing 6.1% in October.
In other economic data released on Friday, durable goods orders decreased 2.1% in November.
However, the final reading for December University of Michigan’s consumer sentiment edged up from 56.8 in November to 59.7 for December.
Weekly Roundup
The Nasdaq closed 2% lower for the week to record its third-straight weekly decline. The S&P 500 recorded a weekly decline of 0.2%. However, the Dow was the outperformer, closing 0.9% up for the week.
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Stock Market News for Dec 27, 2022
Wall Street closed mostly higher on Friday, in a light trading day ahead of the Christmas weekend as recession fears continued to dampen investors’ spirit despite data showing signs of cooling inflation. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.5% or 176.44 points to finish at 33,203.93 points.
The S&P 500 advanced 0.6% or 22.43 points to end at 3,844.82 points. Energy and utility stocks were the biggest gainers.
The Energy Select Sector SPDR (XLE) gained 3.2%. The Utilities Select Sector SPDR (XLU) climbed 1%. All 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq rose 0.2% or 21.74 points to close at 10,497.86 points.
The fear-gauge CBOE Volatility Index (VIX) was down 5.01% to 20.87. Advancers outnumbered decliners on the NYSE by a 2.06-to-1 ratio. On Nasdaq, a 1.09-to-1 ratio favored advancing issues. A total of 7.75 billion shares were traded on Friday, lower than the last 20-session average of 11.41 billion.
Recession Fears Dent Investors' Confidence
Trading was in low volume on Friday ahead of the holiday weekend. Markets opened lower on Friday following the release of a series of fresh economic data, including the November personal consumption index (PCE) data, the Fed’s preferred measure of inflation. PCE for November increased a meager 0.1%, lower than the consensus estimate.
Also, the rate of inflation slowed year over year in November. Experts are of the opinion that the latest reading will not have much impact on the Fed’s plans of continuing with its aggressive rate hike policy.
Investors are worried about how long the Fed will continue with its rate-hike policy. Economists also believe that trading will continue to be volatile and stocks will remain under pressure until the Fed signals a cut in interest rates.
This has been dampening investors’ sentiments as they believe that the Fed’s rate-hike stance would push the economy into a recession. These fears have also somewhat dashed investors’ hopes of a year-end rally, resulting in massive losses in December.
However, energy stocks were the big gainers on Friday. Shares of Exxon Mobil Corporation (XOM - Free Report) jumped 2.7%, while Chevron Corporation (CVX - Free Report) gained 3.1%. Exxon Mobile has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
U.S. consumer prices index, increased 0.1% in November after jumping 0.9% in October and also came in lower than economists’ expectations of an increase of 0.2%. On a year-over-year basis, it increased 4.7% in November after rising 5% in October.
Excluding the volatile food and energy components, the PCE price index rose 0.2% in November, after climbing 0.3% in the month earlier.
The PCE Price Index increased 0.1% in November, after climbing 0.4% in the month earlier. In the 12 months through November, PCE Price Index rose 5.5% after increasing 6.1% in October.
In other economic data released on Friday, durable goods orders decreased 2.1% in November.
However, the final reading for December University of Michigan’s consumer sentiment edged up from 56.8 in November to 59.7 for December.
Weekly Roundup
The Nasdaq closed 2% lower for the week to record its third-straight weekly decline. The S&P 500 recorded a weekly decline of 0.2%. However, the Dow was the outperformer, closing 0.9% up for the week.