Stock prices trended lower in afternoon trading on Friday, although major indexes were poised to post a weekly gain as Wall Street digested retail updates and oil losses amid signals of a slowing economy.
The S&P 500 (^GSPC) fell slightly, falling just below the zero line, while the Dow Jones Industrial Average (^DJI) fell 0.05%, or around 16 points. The tech-heavy Nasdaq Composite (^IXIC) fell 0.1%.
All three U.S. indexes are on track for weekly gains thanks to a stormy midweek rally that came as the market became convinced the Federal Reserve could scale back interest rate hikes. Cooler inflation and weaker jobs data were seen as signs that central bank tightening was finally putting pressure on the US economy.
Some investors see similar signals in retailers’ updates. Gap (GPS) gave a gloomy forecast for holiday sales in its earnings late Thursday, joining Walmart and Target in warning that a decline in consumer spending will hurt the crucial shopping season.
Oil prices also pointed to a slowdown as they fell into a bear market ahead of the OPEC+ meeting later in November. West Texas Intermediate crude oil (CL=F) rose 3% while Brent crude futures (BZ=F) rose nearly 4% on Friday, but both were still facing a weekly loss after hitting their lowest level since had reached almost four months.
Meanwhile, Alibaba’s (BABA) decision to abandon the spinoff of its cloud unit drew attention to the troubles of the Chinese e-commerce giant, whose shares sank in New York, shedding more than $20 billion in market value. The decision, which Alibaba said was due to Washington’s chip restrictions, also highlighted that U.S.-China relations are still strained after a meeting of the country’s presidents failed to attract much attention.
Stock trends in afternoon trading
Here are some of the stocks topping Yahoo Finance’s Trend Ticker page during afternoon trading on Friday:
ChargePoint (CHPT): The electric vehicle charging company plunged more than 30% on Friday after reporting preliminary third-quarter results that showed revenue would fall to as much as $108 million, well below the expected lower range of $150 million. Additionally, the company announced that its CEO and CFO would be leaving. COO Rick Wilmer will be the new CEO as the company searches for a permanent CFO.
Ross (RUST): Shares rose nearly 8% on Friday afternoon after the discount retailer reported better-than-expected quarterly results and raised its outlook as consumers sought to combat high inflation by bargain hunting.
Gap (GPS): The clothing retailer jumped 30% after the retailer reported third-quarter earnings that beat expectations. The strong market reaction comes after a week of gains from major retailers such as Target (TGT), Walmart (WMT) and Home Depot (HD), which also beat expectations but offered a cautious outlook.
BJ’s Wholesale Club (BJ): The warehouse club chain fell 3% on Friday after it reported weaker-than-expected quarterly sales and, like many other retailers, predicted slower holiday season traffic.
Shares are falling in afternoon trading
Stock prices fluctuated in afternoon trading on Friday, with all major indexes sliding below the zero line as they continued to cling to overall gains for the week.
The S&P 500 (^GSPC) fell about 0.03%, while the Dow Jones Industrial Average (^DJI) fell 0.05%, or about 20 points. The tech-heavy Nasdaq Composite (^IXIC) fell 0.1%.
Resilience is giving way to more demanding consumers
Consumers remained strong after quarterly inflation. But eventually, unwavering resilience gives way to discretion when swiping the card. Today, shoppers at major retailers are slowing down their spending, becoming pickier, avoiding expensive items and delaying purchases.
In earnings calls this week, executives painted a picture of a more sophisticated American consumer, exhausted by higher costs and coping with fears of mounting credit card debt and dwindling savings. Major retailers such as Target (TGT), Walmart (WMT) and Home Depot (HD) beat expectations but expressed cautious outlooks for the coming months as consumers felt a moderate decline.
Retail sales fell 0.1% in October from the previous month, marking the first monthly decline since March, according to new Commerce Department data.
“While it is somewhat encouraging to see that spending did not fall sharply in October, the pause is likely a sign of further weakness to come,” Jefferies economist Thomas Simons said in a research note following the report retail sales.
A weakened consumer can still be strong enough for corporate profits, especially if companies can exceed lowered expectations. But selective purchasing and budget overruns can only advance the economy so much.
Business leaders welcome the bill to bridge spending
President Joe Biden has signed into law a temporary “two-step” solution to Washington’s spending disputes and will give Congress and the country a temporary reprieve from shutdown struggles, at least for the holidays.
The economy breathed a sigh of relief that a standstill and the associated economic effects could be averted.
reports Ben Werschkul of Yahoo Finance.
Business Roundtable CEO Joshua Bolten thanked “members of Congress for their collaboration” in a statement, adding that he hopes the collaboration can be repeated next year when spending debates resume.
The 32-page bill sidestepped another self-inflicted crisis in Washington and averted a government shutdown that, among many other implications, had threatened to cut TSA workers’ paychecks just before the busy Thanksgiving travel week. The agreement’s two steps include funding for some areas of the federal government – such as the departments of agriculture and transportation – until January 19, 2024. Authorization for the rest of the Washington bureaucracy expires just two weeks later, on February 2.
Stock trends in morning trading
Here are some of the stocks topping Yahoo Finance’s Trend Ticker page during morning trading on Friday:
Applied Materials (AMAT): Shares of one of the largest U.S. chipmakers fell more than 4% after news that the company is facing a criminal investigation for allegedly violating export restrictions to China. The Justice Department is investigating the company’s dealings with China’s largest chipmaker, Semiconductor Manufacturing International Corp. (0981.HK) are investigating whether Applied Materials sold hundreds of millions of dollars worth of equipment without the appropriate licenses.
Gap (GPS): The clothing retailer jumped nearly 30% on Friday morning after the retailer reported third-quarter earnings that beat expectations. The strong market reaction comes after a week of gains from major retailers such as Target (TGT), Walmart (WMT) and Home Depot (HD), which also beat expectations but offered a cautious outlook.
BJ’s Wholesale Club (BJ): The warehouse club chain fell 3% on Friday after it reported weaker-than-expected quarterly sales and joined other retailers in predicting slower holiday season traffic.
Alibaba (BABA): Shares fell nearly 3% after the Hong Kong listing wiped $20 billion off its market capitalization following a decision to stop spinning off its cloud computing business.
After a mixed opening, shares are heading for a weekly gain
Stocks were little changed at the start of Friday’s trading session, giving Wall Street a weekly gain even as indexes fell slightly into the red.
The S&P 500 (^GSPC) fell about 0.04%, while the Dow Jones Industrial Average (^DJI) was just above the zero line. The tech-heavy Nasdaq Composite (^IXIC) fell 0.1%.
KStock futures are mixed as Wall Street looks to build on gains
Tech stocks stumbled before the bell on Friday but remained on track for a weekly gain along with the other major U.S. indicators.
Dow Jones Industrial Average futures (^DJI) rose 0.23%, or 81 points, while S&P 500 futures (^GSPC) rose 0.18%. Contracts on the tech-heavy Nasdaq 100 (^NDX) fell 0.05%.
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