U.S. stocks had a bit of a rough day on Friday. The week had been pretty wild, with some companies reporting good earnings, while others had mixed results. Plus, there was some economic news that hinted at interest rates staying on the high side for a while.
The Nasdaq did manage to make some gains, thanks to tech giants like Amazon, Apple, and Meta Platforms. They were the stars of the show. However, the S&P 500 and the Dow Jones Industrial Average didn’t have such a good time, and their numbers went down.
All three of these stock market measures had a pretty tough week, with losses of over 2%.
The S&P 500, which is a key indicator of how the stock market is doing, ended the day more than 10% below its highest point at the end of July.
Ross Mayfield, an expert in investment strategy, said, “It’s tough to go against the flow in the stock market, and right now, the flow is heading downward. Companies are making decent profits, but they’re not giving us the spark we need to turn things around and make prices go up.”
The Commerce Department’s highly anticipated report on how much people are spending (Personal Consumption Expenditures or PCE) showed that inflation is gradually coming down, just as everyone expected. It’s getting closer to the 2% annual target that the Federal Reserve has in mind. At the same time, consumer spending, which makes up about 70% of the U.S. economy, pleasantly surprised everyone with strong numbers.
An expert named Mayfield said, “The economy would be perfectly fine if inflation was around 3%. It’s just that we need to cover that last bit to reach the Fed’s 2% goal. The real question is how determined the Fed is to hit that hard 2% mark.”
However, this data didn’t really change what most people thought would happen in the stock market. It’s still expected that the Federal Reserve will keep its main interest rate the same when they have their policy meeting in November.
We’re wrapping up a busy week of companies reporting their third-quarter results. Almost one-third of the companies in the S&P 500 shared their numbers.
By the end of the week, we’re about halfway through the reporting season, with 245 S&P 500 companies having already shared their results. The good news is that 78% of them beat the expectations of experts.
Now, analysts are looking ahead and predicting that the S&P 500’s annual earnings growth will be about 4.3%. This is a big improvement compared to the 1.6% growth that people were expecting at the beginning of the month.
An expert named Mayfield commented, “The big tech companies were expected to do really, really well, and they did okay, but not amazing. However, when we look at the bigger picture, things are looking good. This could be the foundation for a strong finish to the year.”
Amazon.com had a great day, with its stock price going up by 6.8%. They mentioned that their cloud business is doing well and that they expect to make more money during the holiday season.
Intel, the chipmaker company, also had a fantastic day, with its stock shooting up by 9.3%. This good news had a positive effect on the entire tech sector.
The Philadelphia SE Semiconductor index went up by 1.2%.
On the other hand, the Dow Jones Industrial Average didn’t have such a good day. It went down by 366.71 points, which is a 1.12% decrease, ending at 32,417.59. The S&P 500 also went down, losing 19.86 points, or 0.48%, and finishing at 4,117.37. But the Nasdaq Composite managed to buck the trend and went up by 47.41 points, or 0.38%, reaching 12,643.01.
Out of the 11 major sectors in the S&P 500, energy had the biggest drop in percentage. On the flip side, the only sectors that made gains were consumer discretionary, tech, and communication services.
Chevron, the oil and gas company, saw a 6.7% drop in its stock price because they reported lower profits for the third quarter. Exxon Mobil, another big player in the energy sector, initially had some gains but then lost 1.9% as they revealed a 54% decrease in profits compared to the previous year.
Ford Motor had a rough day, with its stock falling by 12.2%. They had to withdraw their forecast for the whole year because they’re not sure about the future of their agreement with the United Auto Workers union. Also, they mentioned that electric vehicles are still facing a lot of challenges.
In the stock market, there were more companies whose stock went down compared to those that went up. On the New York Stock Exchange (NYSE), there were nearly 2.7 declining stocks for every one that advanced. On the Nasdaq, there were about 2.08 declining stocks for each one that went up.
The S&P 500 didn’t have any new highs but had 67 new lows. Meanwhile, the Nasdaq Composite had 10 new high points but 478 new lows.
The total volume of shares traded on U.S. stock exchanges was 10.55 billion shares, which is just slightly lower than the 10.69 billion shares traded on an average day in the past 20 trading days.
