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U.S. stocks closed lower on Friday as investors weighed fresh economic data and concerns grew over inflation ahead of the Fed’s two-day policy meeting scheduled to begin this week. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.9% or 305.02 points to end at 33,476.46 points.
The S&P 500 slipped 0.7% or 29.13 points to close at 3,934.38 points. Energy and healthcare stocks were the biggest losers.
The Energy Select Sector SPDR (XLE) declined 2.4%, while the Health Care Select Sector SPDR (XLV) lost 1.3%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.7% or 77.39 points to finish at 11,004.62 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.24% to 22.83. A total of 9.9 billion shares were traded on Friday, lower than the last 20-session average of 10.9 billion.
High Inflation Continues to Worry Investors
Stocks closed lower on Friday in a week that once again saw inflation worries denting investors’ sentiment. Worries mounted further after the producer-price index (PPI) showed wholesale prices increased once again in November. Also, Core PPO, which excludes the volatile food and energy costs, rose higher than expectations.
The data, which were released ahead of the opening bell, immediately took its toll on stocks. The fears of mounting inflation were somewhat alleviated by positive consumer sentiment data.
However, the focus remained mostly on next week’s consumer price index, which is due on Tuesday. Also, investors are awaiting Fed’s upcoming two-day policy meeting which is scheduled to start on Nov 13. The Fed is expected to raise interest rates by another 50 basis points at the end of its meeting.
Fed Chair Jerome Powell has hinted at small rate hikes than it did previously but investors are now worrying if that will help bring inflation down and prevent a recession. This took a toll on markers once again.
The Bureau of Labor Statistics reported that the producer price index increased 0.3% in November, which came in above expectations of 0.2%. Also, revised data showed PPI in October increased 0.3% instead of the earlier reported 0.2%. Core PPI, which excludes the volatile energy and food prices, also rose 0.3% in November.
The University of Michigan’s measure of consumer sentiment came up with a preliminary reading of 59.1 in December, rising from 56.8 in November. Consumers’ inflation expectations over the next year declined to 4.6% in December from 4.9% in the previous month.
Weekly Roundup
The Dow ended 2.8% down for the week, to record its worst week since September. The Nasdaq closed 4% lower for the week, while the S&P 500 fell 3.4%.
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Stock Market News for Dec 12, 2022
U.S. stocks closed lower on Friday as investors weighed fresh economic data and concerns grew over inflation ahead of the Fed’s two-day policy meeting scheduled to begin this week. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.9% or 305.02 points to end at 33,476.46 points.
The S&P 500 slipped 0.7% or 29.13 points to close at 3,934.38 points. Energy and healthcare stocks were the biggest losers.
The Energy Select Sector SPDR (XLE) declined 2.4%, while the Health Care Select Sector SPDR (XLV) lost 1.3%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.7% or 77.39 points to finish at 11,004.62 points.
The fear-gauge CBOE Volatility Index (VIX) was up 2.24% to 22.83. A total of 9.9 billion shares were traded on Friday, lower than the last 20-session average of 10.9 billion.
High Inflation Continues to Worry Investors
Stocks closed lower on Friday in a week that once again saw inflation worries denting investors’ sentiment. Worries mounted further after the producer-price index (PPI) showed wholesale prices increased once again in November. Also, Core PPO, which excludes the volatile food and energy costs, rose higher than expectations.
The data, which were released ahead of the opening bell, immediately took its toll on stocks. The fears of mounting inflation were somewhat alleviated by positive consumer sentiment data.
However, the focus remained mostly on next week’s consumer price index, which is due on Tuesday. Also, investors are awaiting Fed’s upcoming two-day policy meeting which is scheduled to start on Nov 13. The Fed is expected to raise interest rates by another 50 basis points at the end of its meeting.
Fed Chair Jerome Powell has hinted at small rate hikes than it did previously but investors are now worrying if that will help bring inflation down and prevent a recession. This took a toll on markers once again.
Energy stocks suffered the most. Shares of Exxon Mobil Corporation (XOM - Free Report) declined 0.8%, while Chevron Corporation (CVX - Free Report) fell 3.2%. Chevron Corporation has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Bureau of Labor Statistics reported that the producer price index increased 0.3% in November, which came in above expectations of 0.2%. Also, revised data showed PPI in October increased 0.3% instead of the earlier reported 0.2%. Core PPI, which excludes the volatile energy and food prices, also rose 0.3% in November.
The University of Michigan’s measure of consumer sentiment came up with a preliminary reading of 59.1 in December, rising from 56.8 in November. Consumers’ inflation expectations over the next year declined to 4.6% in December from 4.9% in the previous month.
Weekly Roundup
The Dow ended 2.8% down for the week, to record its worst week since September. The Nasdaq closed 4% lower for the week, while the S&P 500 fell 3.4%.