Stocks Waver, on Track for Fourth Weekly Loss - WSJ
S E E D E D C O N T E N T
Stocks wavered on Friday, with the Dow Jones Industrial Average and the S&P 500 on track for their fourth straight weekly loss, as investors parsed earnings from Chevron , CVX -4.88% Caterpillar and other big-name companies.
The Dow was down 87 points, or 0.3%, in late-morning trading. The S&P 500 ticked up 0.2%. The technology-heavy Nasdaq Composite gained 0.6%.
Chevron slid 4.7% after reporting fourth-quarter earnings that were lower than expected, even as surging commodity prices lifted the oil producer to its most profitable year since 2014 . Caterpillar tumbled 5.7% after the equipment maker reported a surge in costs that offset a jump in revenue.
Shares of Robinhood Markets rebounded from a steep loss of more than 10% after the opening bell and were recently up about 2%. The brokerage popular with small investors reported a larger-than-expected quarterly loss on Thursday afternoon.
Among the day’s winners, Apple rose 4.3% after the tech giant posted record revenue and profits . Visa rallied 6.3% after beating analysts’ forecasts for profits and sales.
Stocks have slumped since the beginning of January as the Federal Reserve has moved to hike interest rates to combat surging inflation. Fed Chairman Jerome Powell’s comments Wednesday added to expectations that the central bank will start a series of rate increases in March . Low rates during the pandemic helped fuel a huge rally in stocks and other risky assets.
“Cheap money is like a comfort blanket for investors and for markets,” said Jane Foley, senior foreign-exchange strategist at Rabobank. “Almost inevitably, you start to withdraw some of that cheap money and you’re going to have more volatility in the markets.”
New government data released Friday showed the upward pressure on prices that has worried policy makers. The Fed’s preferred measure of inflation, the core personal-consumption expenditures price index, rose at 4.9% in December over the prior year. A separate measure showed employers spent 4% more on wages and benefits last year—an increase not seen since 2001—as a tight labor market encouraged workers to demand pay hikes.
Meanwhile, new Commerce Department data showed consumer spending fell last month amid rising prices and the fallout from the Omicron wave of Covid-19.
Inflation concerns have filtered into this week’s corporate earnings reports. Mondelez International said late Thursday that it would likely raise prices further this year. Its shares fell about 3% on Friday after the global food giant said its profitability was being squeezed by rising ingredient and transportation costs.
Jitters over the Fed and inflation have preoccupied investors even as corporate earnings have generally been solid. Almost a third of the companies on the S&P 500 have reported fourth-quarter results, and 78% of them have beaten analysts’ estimates for earnings per share, according to FactSet.
Investors bought government bonds on Friday, pushing down yields. The yield on the 10-year Treasury note dropped to 1.789% from 1.807% on Thursday. Bond yields move in the opposite direction from prices.
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I think it was J P Morgan who once said: "It's times like these when the most timid run for cover!"
It is and has always been the case that the stock markets are fickle windsocks who catch colds when warm winds blow.
Stupid Biden policies are playing havoc with my future retirement well being.