US stocks end mixed on Friday, but the Dow, S&P 500 and Nasdaq post another week of gains

U.S. stock indices closed mostly higher on Friday after choppy trading, after oil prices rebounded following reports of a missile strike on a Saudi Aramco facility and as investors continued to weigh on rising interest rates.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite each posted a second straight week of gains, as investors looked far beyond the Russia-Ukraine war for increasingly hawkish comments from security officials. Federal Reserve.

How have stock market indices evolved?
  • The Dow Jones Industrial Average DJIA,
    +0.44%
    rose 153.30 points, or 0.4%, to close at 34,861.24.

  • The S&P 500 SPX,
    +0.51%
    advanced 22.90 points, or 0.5%, to end at 4,543.06.

  • The Nasdaq Composite COMP,
    -0.16%
    fell 22.54 points, or 0.2%, to end at 14,169.30.

On Thursday, the Dow Jones Industrial Average rose nearly 350 points, or 1%, while the S&P 500 gained 1.4% and the Nasdaq Composite climbed 1.9%.

For the week, the Dow Jones gained 0.3%, the S&P 500 rose 1.8% and the Nasdaq advanced 2%.

What drove the markets?

US stock indices ended a choppy trading session on Friday with mixed results after oil futures rose on reports that a missile strike had caused an explosion and fire in a installation of Saudi Aramco in Jeddah. Yemen’s Iran-backed Houthi rebels have claimed responsibility for past strikes on Saudi installations.

Meanwhile, the Federal Reserve’s monetary policy and the Russian-Ukrainian war remained the focus of investors’ concerns.

“Investors are readjusting their views on how high interest rates should be and how quickly those rates need to rise in order to reduce inflationary pressure,” according to James Solloway, chief market strategist and principal portfolio manager at SEI Investments Co.

The Russian-Ukrainian war was ‘a major shock’ that could make the inflation problem ‘even more intense’ before the skyrocketing cost of living starts to come down, Solloway said in an interview phone Friday. “Even if peace breaks tomorrow,” he said, shortages of energy, food and metals will remain a concern as Russia will continue to be “isolated” from the West.

“Investors should expect more volatility and a very mixed performance from equities,” Solloway said. “The specter of stagflation is beginning to rise.”

Computer SP500EW.45,
-0.22%
and consumer discretionary were the worst performing sectors in the S&P 500 on Friday, each posting losses of around 0.1%, according to FactSet data, at last check. The power sector SP500EW.10,
+2.49%
posted the largest gains, up about 2.3%.

Rising yields “reignite concerns about valuations among the most expensive stocks in the market,” said Jeff Kleintop, chief global investment strategist at Charles Schwab, in a phone interview Friday. “Financials, energy and more cyclical segments of the market are doing well,” he said. The financial sector of the S&P 500 SP500EW.40,
+1.32%
closed up about 1.3% on Friday, according to FactSet data.

Meanwhile, something “unusual” happened in the stock market recently, according to Kleintop. He said financial conditions have eased since the initial Russian-Ukrainian war tightening, “even though the Fed is talking about being more hawkish.” While that helped lift the stock market, the recent rally is likely “limited,” he said, as financial conditions “eventually” will tighten again if the Fed continues its “hawkish message.”

“Investor bias remains toward larger, safer stocks with the largest, Apple AAPL,
+0.37%,
on a 15% rise from the recent low and the Dow is more stable than indices with smaller companies,” said Louis Navellier, founder and chief investment officer at Navellier & Associates, in a note.

“The focus going forward will be on companies that demonstrate pricing power in the next round of earnings, as inflation and the resulting rise in interest rates will remain the primary concern,” he said. he declared.

Investors and economists have expected more aggressive interest rate hikes from the Federal Reserve after Chairman Jerome Powell said earlier this week that the central bank could raise rates by more than 25 basis points , or a quarter of a percentage point, in future meetings, while some policymakers argued for half-point increases.

New York Fed President John Williams said on Friday he would support a half-point move if warranted, but indicated it was premature to call on the size of one. future rate increase. Citigroup C in a note on Friday saw the Fed hike interest rates in four consecutive half-percentage-point moves and then back up through 2023, sending the benchmark rate into a range of 3.5% to 3.75%.

In U.S. economic data on Friday, the final reading of consumer sentiment from the University of Michigan in March fell slightly to 59.4 and remained at a nearly 11-year low due to high inflation and the anxiety aroused by the Russian invasion of Ukraine.

“Consumer sentiment has been hurt by inflation more than anything else,” SEI’s Solloway said. “People don’t like it when they see gas pump prices jump” or grocery store prices that are “materially higher” than just a few months ago, he said. .

In other U.S. economic data, pending home sales fell 4.1% in February, according to the National Association of Realtors on Friday. This is the lowest level in nearly two years.

Elsewhere, the European Council and European Parliament have reached a tentative agreement on a Digital Markets Act, aimed at tech giants such as Google’s parent company Alphabet Inc. GOOGL,
+0.07%,
Apple and parent Facebook Meta Platforms FB,
+1.02%.

Which companies were targeted?
  • JD.com Inc.
    JD,
    -2.60%
    shares fell 2.6% after the US Public Company Accounting Oversight Board said it was premature to say it was close to a deal with China allowing audit inspections of Chinese companies listed in the United States. Alibaba Holding Group Shares of BABA slid 1.9%, after falling around 6% in Hong Kong.
  • NIO inc.
    NIO,
    -9.42%
    Shares fell 9.4% after the Chinese electric vehicle maker reported better-than-expected fourth-quarter revenue but disappointed with its delivery forecast.
  • Bed Bath and Beyond Inc.
    BBBY,
    +2.22%
    shares rose 2.2%, after the homewares retailer announced a “cooperative agreement” with activist investor Ryan Cohen and RC Ventures LLC.
How have other assets performed?
  • The yield of the 10-year Treasury note TMUBMUSD10Y,
    2.478%
    jumped about 15.1 basis points to 2.491%, the highest since May 6, 2019 based on 3 p.m. Eastern trading levels, according to Dow Jones Market Data. Treasury yields and prices move in opposite directions.

  • The ICE US Dollar Index DXY,
    +0.02%,
    a measure of the currency against a basket of six major rivals, was slightly higher on Friday and showed a weekly gain of 0.6%.

  • BitcoinBTCUSD,
    +0.08%
    was trading up 1.3% to around $44,485.

  • In oil futures, West Texas Intermediate crude for May delivery CLK22,
    -1.12%
    rose 1.4% on Friday to settle at $113.90 a barrel. For the week, first-month contract prices climbed 10.5%, according to Dow Jones Market Data.

  • Gold for delivery in April GCJ22,
    +0.17%
    fell 0.4% to settle at $1,954.20 an ounce. But the precious metal still saw a weekly rise of 1.3% based on the prices of the most active contract, according to Dow Jones Market Data.

  • In European equities, the Stoxx Europe 600 SXXP,
    +0.11%
    closed up 0.1% on Friday and posted a weekly decline of 0.2%. London’s FTSE 100 UKX,
    +0.21%
    gained 0.2% on Friday for a weekly advance of 1.1%.

  • In Asia, the Shanghai Composite SHCOMP,
    -1.17%
    closed down 1.2% on Friday for a weekly decline of 1.2%. The Hang Seng HSI index,
    -2.47%
    fell 2.5% on Friday, booking a weekly decline of less than 0.1%. Nikkei 225 NIK from Japan,
    +0.14%
    rose 0.1% on Friday, taking its weekly gain to 4.9%.

—Barbara Kollmeyer contributed to this report.

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