U.S. stocks end mixed, but book weekly losses as Dow suffers longest losing streak since 1932

US equities closed mixed on Friday, with the S&P 500 index gaining after trading in bearish territory earlier in the session, but the three main benchmarks recorded another week of losses. The Dow Jones Industrial Average suffered its eighth consecutive weekly decline, marking its longest loss streak since April 1932, according to Dow Jones Market Data.

How did they trade the shares?
  • The Dow Jones Industrial Average DJIA,
    + 0.03%
    rose 8.77 points, or less than 0.1%, to close at 31,261.90.

  • The S&P 500 SPX,
    + 0.01%
    added less than 1 point to end almost flat at 3,901.36, after previously trading in bearish territory.

  • The Nasdaq Composite COMP,
    it fell 33.88 points, or 0.3%, to 11,354.62, its lowest closing value since November 3, 2020.

On Thursday, the Dow Industrial and the S&P 500 recorded their lowest closures since March 2021, according to Dow Jones Market Data.

During the week, the Dow fell 2.9%, the S&P 500 fell 3.1% and the Nasdaq fell 3.8%, according to Dow Jones Market Data.

What drove the markets?

Friday morning’s rebound was short-lived, with the top three benchmarks showing strong losses in the afternoon before ending mixed in the closing bell.

The early rally offered traders a chance to “lighten the exposure” before the weekend, coming amid “growing uncertainty and anxiety” about the direction of the economy as the Federal Reserve raises interest rates for fight high inflation, according to Wayne Wicker. , Investment Director of MissionSquare Retirement.

“Investor psychology is driving a lot of that,” Wicker said in a telephone interview Friday, referring to the sale.

The S&P 500 fell in bearish market territory on Friday afternoon, but skirted there to finish. A bear market is defined by a drop of at least 20% from a recent peak.

Reads: The S&P 500 narrowly avoids a bear market. How long do they last once they arrive?

“Stocks remain volatile. The list of investor concerns is growing,” Fawad Razaqzada, a market analyst at City Index and Forex.com, said in a statement.

“Inflation. Interest rate hikes. Low economic growth. Inflation. Recession. Perhaps the most important thing for the actions is that the Fed is not there to provide a cushion, as before, “he wrote.

Initially, stocks rose after the People’s Bank of China lowered its lending rate to five years on Friday, with the aim of boosting weak home sales by lowering mortgage costs. The country has been battling COVID outbreaks, with blockades in industrial centers such as Shanghai being blamed for weak factory and consumer activity data in April.

But analysts said the move also underscored concerns.

“Where the rest of the world is thinking of raising rates because of inflation, they’re lowering rates to help the economy,” said JJ Kinahan, chief market strategist at online brokerage tastytrade Inc. ., in a telephone interview Friday. “I think it’s a bit of a warning sign,” as US companies benefiting from demand in China may be hurt by a slowdown in the Chinese economy and related supply chain disruptions. to the country’s blockades, he said.

The discretionary consumer sector was the worst performing sector in the S&P 500 on Friday, with a 1.5% drop, according to FactSet data.

Friday was the last trading day before the expiration of stock options and exchange traded funds, which were seen to be contributing to volatility during the session.

Major U.S. stock market indices posted another week of losses, with investors worried about whether the Federal Reserve can control rising inflation without derailing the economy.

The Dow saw its eighth consecutive weekly decline, marking its longest streak of losses since April 1932, according to Dow Jones Market Data. The S&P 500 and Nasdaq Composite each fell for the seventh week in a row, the longest loss since March 2001.

Major retailers this week, such as Walmart WMT and Target TGT, reported disappointing profits, amid rising spending and inflation.

Mark Hulbert: This is the real reason why the stock market is taking off, and it is not because of the weak gains

Last week showed that the risk of economic recession, fears of high inflation reducing corporate performance and rising borrowing costs remain the main concern of the markets, especially after Fed Chairman Jerome Powell, would say the central bank “will not hesitate” to lift it. rates beyond neutral to curb high inflation, according to Christian Stocker, chief strategist in UniCredit Bank’s equity sector in Munich.

“In this environment, investor sentiment is volatile and markets are likely to remain volatile on both sides until there is greater clarity in terms of recession, rates and geopolitical risks,” Stocker said.

The U.S. economic data calendar was empty for Friday, but next week will bring another round of inflation data and personal consumption spending prices.

Which companies were they focused on?
  • Actions of Ross Inc. Stores
    it fell 22.5% after the retailer became the last to report disappointing quarterly results and cut its outlook, blaming higher inflation and rising transportation costs and wages.

  • Deere & Co.
    shares fell 14.1% after the agriculture, construction and forestry equipment maker reported better-than-expected fiscal second-quarter earnings and revenue.

  • Applied Materials Inc.
    shares fell 3.9% after the chip maker reported an error in earnings, revenue and forecasts amid continuing supply chain problems.

  • Foot Locker
    + 4.09%,
    the sportswear and clothing retailer saw its shares rise 4.1% after reporting first-quarter earnings that exceeded expectations.

How were the other assets?
  • The performance of the 10-year Treasury note TMUBMUSD10Y,
    fell 6.9 basis points to 2.785%. Debt yields and prices move opposite each other.

  • ICE US Dollar DXY Index
    + 0.29%,
    a measure of the currency against a basket of six main rivals, rose 0.3%.

  • Bitcoin BTCUSD,
    + 0.41%
    it was down 3.3% to $ 29,229.

  • CL.1 oil futures,
    rose, with crude West Texas Intermediate of the most active July contract rising 0.4% to $ 110.28 a barrel.

  • In GC00 gold futures,
    + 0.21%,
    gold for delivery in June rose less than 0.1% on Friday to $ 1,842.10 an ounce. Yellow metal rose 1.7% during the week, breaking a series of four consecutive weekly falls, according to Dow Jones Market Data.

  • In European equities, the Stoxx Europe 600 SXXP,
    + 0.73%
    closed 0.7% higher on Friday, but fell 0.5% during the week. FTSE 100 UKX London,
    + 1.19%
    it ended 1.2% higher on Friday and recorded a weekly decline of 0.4%.

  • In Asia, the Shanghai Composite Index SHCOMP,
    + 1.60%
    it ended 1.6% higher on Friday for a weekly gain of 2%. The Hang Seng HK: HSI index rose about 3% on Friday, raising its weekly gain to 4.1%. Japan’s Nikkei 225 JP: NIK rose 1.3% on Friday to a weekly gain of 1.2%.

—-Barbara Kollmeyer contributed to this report.

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