Stocks drifted lower in morning trading on Wall Street Friday as the market comes off its best month in more than a year. The S&P 500 slipped 0.1%. The Dow Jones Industrial Average rose 57 points, or 0.2% to 36,011 as of 10:01 a.m. Eastern.
Quick Read
- Stock Market Update: The stock market experienced a slight downturn in morning trading, with the S&P 500 slipping 0.1%. The Dow Jones rose modestly by 57 points (0.2%), while the Nasdaq fell by 0.3%.
- Tech Sector Influence: Big communication and technology companies influenced the market’s movement. Notably, Intel’s shares dropped by 2.4% and Alphabet’s by 1.1%.
- Mixed Corporate Reports: Wall Street reacted to mixed earnings reports and financial updates. Dell’s shares fell 5.3% due to a disappointing revenue forecast, while Ulta Beauty saw a 12% rise following better-than-expected results.
- Economic Context: The week included significant economic reports, but the day was relatively quiet. Treasury yields were stable, and crude oil prices didn’t see much change. European markets showed slight gains, and Asian markets mostly closed lower.
- Investor Sentiment on Fed’s Rate Hikes: Investors have been optimistic, as evidenced by the market’s rise in November, fueled by expectations that the Federal Reserve might halt its interest rate hikes aimed at controlling inflation.
- Recent Inflation Data: The latest inflation data, considered by the Fed, indicates a cooling trend. This easing aligns with the period since mid-2022 when the Fed began aggressively raising interest rates.
The Associated Press has the story:
Wall Street inches lower following its best month in more than a year
Newslooks- NEW YORK (AP)
Stocks drifted lower in morning trading on Wall Street Friday as the market comes off its best month in more than a year. The S&P 500 slipped 0.1%. The Dow Jones Industrial Average rose 57 points, or 0.2% to 36,011 as of 10:01 a.m. Eastern.
Big communication and technology companies were the heaviest weights on the market. Chipmaker Intel fell 2.4% and Google’s parent company, Alphabet, fell 1.1%.
Wall Street had a mixed batch of late earnings reports and financial updates to review. Computer maker Dell fell 5.3% after giving investors a weaker-than-expected revenue forecast. Beauty products retailer Ulta Beauty rose 12% after reporting results that beat estimates.
Investors were dealing with an otherwise quiet day in a week that included some key economic reports. Treasury yields held steady and crude oil prices were relatively stable. European markets were slightly higher and Asian markets closed mostly lower.
Markets marched steadily higher through much of November as investors grew hopeful that the Federal Reserve is finally done raising interest rates in its fight to control inflation. Recent economic data supports that view.
On Thursday, the Fed’s preferred measure of inflation showed a cooling last month. Inflation has been easing overall since the middle of 2022 when the Fed started aggressively raising its benchmark interest rate.
That followed mostly encouraging updates on economic growth and consumer confidence that have raised hopes that the Fed will achieve its sought-after “soft landing,” which involves cooling the inflation without throwing the economy into a recession.
A government report on Friday showed that construction spending continued rising in October, topping economists’ forecasts for growth. Wall Street will get several updates next week on the job market, including the government’s closely watched monthly employment report for November.
Wall Street expects the Fed to continue holding its benchmark interest rate steady at its next meeting in December and into early 2024. Investors are also increasingly betting that the central bank will start cutting rates by the middle of 2024.
Treasury yields have been broadly falling amid sentiment that the Fed’s aggressive rate hike policy is finished and potentially heading for a reversal. The yield on the 10-year Treasury, which influences mortgage rates, fell to 4.29% from 4.34% late Thursday. It was as high as 5.00% in October.
The yield on the two-year Treasury fell to 4.65% from 4.70% late Thursday.
Falling bond yields have helped relieve pressure on stocks, especially technology stocks.
Oil prices remained relatively steady and have been broadly easing for several months, as have U.S. gasoline prices. That is helping to relieve pressure on American families and businesses from rising prices.
Investors entered December on track to close out the year with solid gains. The S&P 500 is up more than 19% and the Nasdaq composite is up 35% in 2023. Smaller-company stocks have also recently turned higher for the year following the market’s recent rally. The Russell 2000 index is now on up more than 4% for the year.
