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U.S. stocks on Friday ended mixed, but Wall Street notched its third straight weekly gain on the back of a continued advance in technology stocks and favorable data on economic growth and inflation.
The earnings season grabbed a chunk of the spotlight, and will heat up next week with one of its busiest stretches. The Federal Reserve’s first monetary policy committee meeting of the eye will also garner significant attention.
The blue-chip Dow (DJI) eked out gains of 0.16% to close at 38,109.43 points. The tech-heavy Nasdaq Composite (COMP.IND) slipped 0.36% to settle at 15,455.36 points, while the S&P 500 (SP500) retreated 0.07% to conclude at 4,890.97 points. The benchmark gauge posted a new intraday all-time peak by hitting a session high at 4,906.69 points.
Intel (INTC) was a major drag on both the Nasdaq (COMP.IND) and the Dow (DJI), sliding 12% after the chip giant disappointed investors with its guidance. Other semiconductor names also declined.
Countering the retreat in Intel (INTC) was a 7% surge in American Express (AXP), with the credit card issuer’s stock hitting a record high. The company issued stronger-than-anticipated outlook and announced plans to boost its dividend.
In other earnings-related moves, KLA Corp (KLAC) was a top S&P 500 (SP500) and Nasdaq Composite (COMP.IND) percentage loser, after the semiconductor equipment manufacturer’s guidance came in short of consensus estimates.
Western Digital (WDC) was a top S&P loser as well, after the data storage company reported its seventh consecutive quarterly decline in revenue.
For the week, the S&P 500 (SP500) rose 1.06%, while the Nasdaq (COMP.IND) rose 0.94% and the Dow (DJI) rose 0.65%.
“The up-move in equities in January has continued to confound and irritate recessionistas to a degree only eclipsed by the actual lack of an actual recession itself,” Alex King, investing group leader of Cestrian Capital Research, told Seeking Alpha.
“The week is on track to close with a damp-squib Friday, the prior joie de vivre dampened by an adverse reaction to Intel (INTC) Q4 numbers. In truth, Intel (INTC) itself and the semiconductor sector at large have been on a huge run since October 2023, so a modest correction was to be expected. We continue to look upwards towards year end,” King added.
Economic data grabbed some of the spotlight from the earnings season on Friday. Before the opening bell, the Bureau of Economic Analysis said that the core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – rose 0.2% M/M in December 2023, matching the consensus figure. On an annual basis, it rose 2.9%, easing from the +3.2% Y/Y reading in November 2023 and below the anticipated number of +3.0%.
While the inflation gauge was a favorable reading, consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 0.7% last month and accelerated from +0.4% in November. The overall data bolstered bets that the Fed would start cutting interest rates this year, though perhaps not as quickly as March.
Treasury yields were largely to the upside after the data. The longer-end 30-year yield (US30Y) was little changed at 4.37%, while the 10-year yield (US10Y) was up 1 basis point to 4.14%%. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 5 basis points to 4.36%.
See how Treasury yields have done across the curve at the Seeking Alpha bond page.
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