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Wall Street ended mixed on Friday to close out the week. Markets pared some of the gains made in the week on important Fed officials turning hawkish. Two of the three major stock indexes ended in the green while one remained flat.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.2%, or 56.81 points, to close at 37,305.16. Twenty-one components of the 30-stock index ended in positive territory, while nine ended in negative.
The tech-heavy Nasdaq Composite gained 0.4%, or 52.36 points, to close at 14,813.92.
The S&P 500 remained virtually flat at 4,719.19. Eight out of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Real Estate Select Sector SPDR (XLRE) and the Health Care Select Sector SPDR (XLV) retracted 1.7%, 1.2% and 0.9%, respectively, while the Technology Select Sector SPDR (XLK) advanced 0.5%.
The fear-gauge CBOE Volatility Index (VIX) decreased 1.6% to 12.28. A total of 19.8 billion shares were traded on Friday, higher than the last 20-session average of 11.8 billion. Decliners outnumbered advancers on the NYSE by a 2.00-to-1 ratio. On the Nasdaq, declining issues led advancing ones by 1.54-to-1.
Comments From Fed Officials Dampen Mood
The recent euphoria witnessed in Wall Street on the back of Jerome Powell’s assertion that the Fed might have reached the end of its rate hike cycle and is looking to cut rates soon got dampened a bit on Friday. One of the top policymakers from the central bank turned hawkish, and the markets pared some of the stellar gains made through the week.
"We aren't really talking about rate cuts right now," New York Fed president John Williams said in an interview on Friday. On the question of rate cuts, he said, "I just think it's just premature to be even thinking about that." The central bank continues to mull whether monetary policy is in the right place to help guide inflation back to its 2% target.
Atlanta Fed president Raphael Bostic also, in an interview given on Friday, suggested that he does not expect a rate cut before third-quarter 2024. This also had an adverse impact on the mood of market participants, as the general consensus is for a rate cut in the first quarter.
All of the three widely followed indexes closed a seventh straight winning week. The Dow Jones Industrial Average, the tech-heavy Nasdaq Composite and the S&P 500 jumped 2.9%, 2.8% and 2.5%, respectively. During the week, investor mood remained upbeat upon the conclusion of the Fed December meeting, where it signaled that interest rates may have already peaked and rate cuts were to be expected in 2024. Inflation indicators also suggested that the tight monetary policy employed by the central bank was taking effect, with headline PPI remaining flat and CPI coming in way below expectations. Treasury yields fell, hovering around the 4% mark, down from their October peak of above 5%.
Economic Data
Per the Federal Reserve, capacity utilization for November came in at 78.8, increasing slightly from the revised figure of 78.7 for October. The October number had been previously reported to be at 78.9.
Industrial production for November increased 0.2% against the revised -0.9% for October. The October number was earlier reported to be at -0.6%.
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Stock Market News for Dec 18, 2023
Wall Street ended mixed on Friday to close out the week. Markets pared some of the gains made in the week on important Fed officials turning hawkish. Two of the three major stock indexes ended in the green while one remained flat.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.2%, or 56.81 points, to close at 37,305.16. Twenty-one components of the 30-stock index ended in positive territory, while nine ended in negative.
The tech-heavy Nasdaq Composite gained 0.4%, or 52.36 points, to close at 14,813.92.
The S&P 500 remained virtually flat at 4,719.19. Eight out of the 11 broad sectors of the benchmark index closed in the red. The Utilities Select Sector SPDR (XLU), the Real Estate Select Sector SPDR (XLRE) and the Health Care Select Sector SPDR (XLV) retracted 1.7%, 1.2% and 0.9%, respectively, while the Technology Select Sector SPDR (XLK) advanced 0.5%.
The fear-gauge CBOE Volatility Index (VIX) decreased 1.6% to 12.28. A total of 19.8 billion shares were traded on Friday, higher than the last 20-session average of 11.8 billion. Decliners outnumbered advancers on the NYSE by a 2.00-to-1 ratio. On the Nasdaq, declining issues led advancing ones by 1.54-to-1.
Comments From Fed Officials Dampen Mood
The recent euphoria witnessed in Wall Street on the back of Jerome Powell’s assertion that the Fed might have reached the end of its rate hike cycle and is looking to cut rates soon got dampened a bit on Friday. One of the top policymakers from the central bank turned hawkish, and the markets pared some of the stellar gains made through the week.
"We aren't really talking about rate cuts right now," New York Fed president John Williams said in an interview on Friday. On the question of rate cuts, he said, "I just think it's just premature to be even thinking about that." The central bank continues to mull whether monetary policy is in the right place to help guide inflation back to its 2% target.
Atlanta Fed president Raphael Bostic also, in an interview given on Friday, suggested that he does not expect a rate cut before third-quarter 2024. This also had an adverse impact on the mood of market participants, as the general consensus is for a rate cut in the first quarter.
Consequently, shares of American Electric Power Company, Inc. (AEP - Free Report) and Exelon Corporation (EXC - Free Report) declined 1.3% and 6.4%, respectively. Both carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Weekly Roundup
All of the three widely followed indexes closed a seventh straight winning week. The Dow Jones Industrial Average, the tech-heavy Nasdaq Composite and the S&P 500 jumped 2.9%, 2.8% and 2.5%, respectively. During the week, investor mood remained upbeat upon the conclusion of the Fed December meeting, where it signaled that interest rates may have already peaked and rate cuts were to be expected in 2024. Inflation indicators also suggested that the tight monetary policy employed by the central bank was taking effect, with headline PPI remaining flat and CPI coming in way below expectations. Treasury yields fell, hovering around the 4% mark, down from their October peak of above 5%.
Economic Data
Per the Federal Reserve, capacity utilization for November came in at 78.8, increasing slightly from the revised figure of 78.7 for October. The October number had been previously reported to be at 78.9.
Industrial production for November increased 0.2% against the revised -0.9% for October. The October number was earlier reported to be at -0.6%.