Stocks edged lower in afternoon trade on Friday, as Wall Street digested retail updates and oil losses amid signs of a slowing economy, even as major indexes were poised to post gains for the week.
The S&P 500 (^GSPC) fell just below the flatline, while the Dow Jones Industrial Average (^DJI) was down 0.05%, or roughly 16 points. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.1%.
All three U.S. indexes are on course for weekly gains as the market grew on expectations that the Federal Reserve could ease interest rate hikes again. Cool inflation and soft jobs data were taken as signs that Fed tightening was finally weighing on the US economy.
Some investors see similar signals in retailer updates. Gap ( GPS ) issued a gloomy forecast for holiday sales in its earnings call late Thursday, joining Walmart and Target in warning that a drop in consumer spending could hurt the all-important shopping season.
Oil prices hinted at a slowdown by plunging into a bear market ahead of the OPEC+ meeting in November. West Texas Intermediate crude ( CL=F ) rose 3%, while Brent crude futures ( BZ=F ) advanced nearly 4% on Friday, but both headed for weekly losses after touching their lowest levels in nearly four months.
Meanwhile, Alibaba’s ( BABA ) decision to abandon a spin-off of its cloud unit drew attention to struggles at the Chinese e-commerce giant, whose shares wiped more than $20 billion off their market value in New York. The decision, which Alibaba said was prompted by Washington’s chip bans, also highlights how US-China relations are still strained after a meeting between the countries’ presidents failed to make a splash.
Stocks trending in afternoon trade
Here are some of the leading stocks on Yahoo Finance’s Trending Tickers page during Friday afternoon trading:
Charge Point (CHPT): The EV charging company fell more than 30% on Friday after posting preliminary third-quarter results showing revenue falling to $108 million, short of expectations of $150 million. Additionally, the company announced the departure of its CEO and CFO. COO Rick Willmer will become the new CEO while the company searches for a permanent CFO.
Rose (Roast): Shares rose nearly 8% on Friday afternoon after the discount retailer posted better-than-expected quarterly results and raised its outlook as consumers look to head into higher inflation with a bargain.
Range (GPS): The apparel retailer jumped 30% after the retailer reported third-quarter earnings that blew away expectations. The strong market reaction comes after a big week of earnings from major retailers including Target ( TGT ), Walmart ( WMT ) and Home Depot ( HD ), which beat expectations but offered a cautious outlook.
BJ’s Wholesale Club (BJ): The warehouse club chain fell 3% on Friday after reporting weaker-than-expected quarterly sales and, like many retailers, forecast slower holiday season traffic.
Shares slip in afternoon trade
Stocks were choppy in afternoon trade on Friday, with all major indexes slipping below the flat line while clinging to overall gains for the week.
The S&P 500 (^GSPC) was down about 0.03%, while the Dow Jones Industrial Average (^DJI) was down .05%, or roughly 20 points. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.1%.
Recession leads to more discerning consumers
Consumers remained strong after a quarter of inflation. But finally, the definitive swipe-the-card fallback gives way to choice. These days, shoppers at big-box retailers are moderating their spending, becoming more selective, avoiding big-ticket items and delaying purchases.
In earnings calls this week, executives painted portraits of U.S. consumers fed up with high spending and dealing with worries about credit card debt and dwindling savings. Major retailers including Target ( TGT ), Walmart ( WMT ), and Home Depot ( HD ) beat expectations, but offered cautious outlooks for the coming months as consumers ease back.
Retail sales fell 0.1% in October from the previous month, according to new data from the Commerce Department, marking the first monthly decline since March.
“While the fact that spending did not slow in October is somewhat encouraging, the pause may be a sign of further weakness to come,” Jefferies economist Thomas Simons said in a research note after the retail sales report. .
A weaker consumer can still be strong enough to drive corporate earnings, especially if companies can beat lower expectations. But selective shopping and budget stretching can only carry the economy so far.
Business leaders appreciate stopgap spending legislation
President Joe Biden signed the legislation as a temporary “two-step” solution to Washington’s spending wrangles and will give Congress and the country temporary relief from the shutdown fight, at least through the holiday season.
The business community breathed a sigh of relief that an embargo and the resulting economic damage had been averted.
Business Roundtable CEO Joshua Bolton thanked “members of Congress for working together” in a statement.
The 32 page law Averting another self-inflicted Washington crisis, a government shutdown threatened to cut TSA workers’ pay just ahead of the busy Thanksgiving travel week, along with several other impacts. Phase two of the deal also includes funding for parts of the federal government — places like the agriculture and transportation sectors — through January 19, 2024. Authorization for the rest of Washington’s bureaucracy expires two weeks later on February 2.
Stocks trending in morning trade
Here are some of the leading stocks on Yahoo Finance’s Trending Tickers page during Friday morning trading:
Application Materials (AMAT): Shares in one of the largest U.S. chipmakers fell more than 4% following reports that the company faces a criminal investigation for violating export restrictions to China. The Justice Department will investigate the company’s dealings with China’s biggest chipmaker Semiconductor Manufacturing International Corp ( 0981.HK ).
Range (GPS): The apparel retailer jumped nearly 30% on Friday morning after the retailer reported third-quarter earnings that blew away expectations. The strong market reaction comes after a big week of earnings from major retailers including Target ( TGT ), Walmart ( WMT ) and Home Depot ( HD ), which beat expectations but offered a cautious outlook.
BJ’s Wholesale Club (BJ): The warehouse club chain fell 3% on Friday after reporting weaker-than-expected quarterly sales and, like other retailers, forecast slower holiday season traffic.
Alibaba (Child): Shares fell nearly 3% after the company’s listing in Hong Kong saw $20 billion in its market capitalization evaporate following a decision to no longer spin off its cloud computing business.
Stocks are headed for a weekly win after the open
Stocks were little changed at the start of the trading session on Friday, setting Wall Street up for a weekly win, even as indexes slipped slightly into the red.
The S&P 500 (^GSPC) was down about 0.04%, while the Dow Jones Industrial Average (^DJI) was just above flatline. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.1%.
Stock futures are mixed as Wall Street makes gains
Tech stocks stumbled after the bell on Friday, but were on track for weekly gains, along with other major U.S. gauges.
Dow Jones Industrial Average futures (^DJI) rose 0.23%, or 81 points, while S&P 500 (^GSPC) futures added 0.18%. Technology-based Nasdaq 100 (^NDX) contracts fell 0.05%.