U.S. Stocks Turn In Mixed Performance For The Day And The Week

Stocks initially extended Thursday’s sell-off but regained some ground over the course of the trading session on Friday. The major averages climbed well off their worst levels of the day, with the Dow reaching positive territory.

The major averages eventually ended the session mixed. The tech-heavy Nasdaq slid 68.56 points or 0.6 percent to 11,787.27 and the S&P 500 fell 11.32 points or 0.3 percent to 4,079.09, but the narrower Dow rose 129.84 points or 0.4 percent to 33,826.69.

The major averages also turned in a mixed performance for the week. While the Nasdaq climbed by 0.6 percent, the Dow edged down by 0.1 percent and the S&P 500 dipped by 0.3 percent.

The early weakness on Wall Street reflected ongoing concerns about the outlook for interest rates following the week’s batch of economic data.

Reports on consumer and producer price inflation and retail sales have led to worries the Federal Reserve could raise rates higher than currently anticipated.

Recent comments from Fed officials have added to the concerns, with some suggesting the central bank could raise rates by another 50 basis points next month.

Selling pressure has waned over the course of the session, however, with a report showing a continued decrease in U.S. import prices potentially helping to offset the negative sentiment.

The Labor Department said import prices dipped by 0.2 percent in January after edging down by a revised 0.1 percent in December. The modest decrease matched economist estimates.

With import prices declining for the seventh straight month, the annual rate of growth slowed to 0.8 percent in January from 3.0 percent in December.

The year-over-year growth was much slower than the 2.9 percent expected by economists and reflects the slowest annual growth since December 2020.

“Import prices provided some encouraging news on the inflation front after stronger than expected CPI and PPI reports earlier this week,” said Matthew Martin, US Economist at Oxford Economics.

He added, “The news, however encouraging, will likely factor little into the Fed’s decision to raise rates at the March meeting, and potentially the May meeting as well, as it continues to wrangle with stubborn inflation.”

The recovery attempt also came as treasury yields showed a notable turnaround, with the benchmark ten-year yield pulling back off its highest levels in well over a month.

Sector News

Despite the recovery attempt by the broader markets, energy stocks remained sharply lower on the day, with a steep drop by the price of crude oil weighing on the sector.

With crude for March delivery tumbling $2.15 or 2.7 percent to $76.34 a barrel, the Philadelphia Oil Service Index dove by 4.8 percent and the NYSE Arca Oil Index plunged by 3.9 percent.

A sharp decline by the price of natural gas also contributed to significant weakness among natural gas stocks, dragging the NYSE Arca Natural Gas Index down by 2.2 percent.

Semiconductor, software and housing stocks also saw considerable weakness, while telecom stocks moved sharply higher on the day.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index slid by 0.7 percent, while Hong Kong’s Hang Seng Index slumped by 1.3 percent.

The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the French CAC 40 Index and the German DAX Index both dipped by 0.3 percent.

In the bond market, treasuries showed a notable turnaround after coming under pressure in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down 1.5 basis points to 3.828 percent after reaching a high of 3.90 percent.

Looking Ahead

Following the long Presidents Day weekend, a report on personal income and spending is likely to be in focus next week, as it includes a reading on inflation said to be preferred by the Federal Reserve.

The minutes of the latest Fed meeting may also attract attention along with reports on new and existing home sales.

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