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US stocks closed mixed on Friday, but Wall Street posted its third consecutive weekly gain on the back of continued upside in technology stocks and favorable data on economic growth and inflation.
Earnings season took a slice of that under the spotlight and will heat up next week with one of its busiest sections. The first meeting of the Federal Reserve’s monetary policy committee will also attract considerable attention.
The blue-chip Dow (DJI) everything went fine earnings of 0.16% close at 38,109.43 points. The Nasdaq Composite, with high technological content (COMP.IND) fell by 0.36% settle at 15,455.36 points, while the S&P 500 (SP500) retreated 0.07% to conclude at 4,890.97 points. The benchmark indicator recorded a new all-time intraday high, hitting a session high of 4,906.69 points.
Intel (INTC) was a major drag on both the Nasdaq (COMP.IND) and Dow (DJI), falling 12% after the chip giant disappointed investors with its guidance. Other semiconductor names also fell.
Countering Intel’s (INTC) decline was a 7% rise in American Express (AXP), with the credit card issuer’s shares hitting a record high. The company posted a stronger-than-expected outlook and announced plans to raise its dividend.
In other earnings-related moves, KLA Corp (KLAC) was an early percentage loser on the S&P 500 (SP500) and Nasdaq Composite (COMP.IND), after the semiconductor equipment maker’s guidance fell short of consensus estimates.
Western Digital (WDC) was also a major S&P loser, after the data storage company reported its seventh consecutive quarterly decline in revenue.
On 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 rally in stocks in January has continued to confound and irritate recessionists to a degree eclipsed only by the actual lack of a true recession itself,” Alex King, investment group leader at Cestrian Capital Research, told Seeking Alpha.
“The week is on track to close with a wet Friday, the previous joie de vivre dampened by an adverse reaction to Intel (INTC) fourth-quarter numbers. Indeed, Intel (INTC) itself and the semiconductor industry at large have been in “We have seen huge growth since October 2023, so a modest correction was to be expected. We continue to look upward towards the end of the year,” King added.
Economic data on Friday brought attention to earnings season. Before the opening bell, the Bureau of Economic Analysis said the personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – rose 0.2% M/M in December 2023, in line with the consensus figure. On a year-over-year basis, it increased 2.9%, down from +3.2% y/y in November 2023 and below the forecast value of +3.0%.
While the inflation gauge provided 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% of November. The overall data bolstered bets that the Fed would begin cutting interest rates this year, though perhaps not as quickly as in March.
Treasury yields were mostly higher after the data. The long-term 30-year yield (US30Y) remained little changed at 4.37%, while the 10-year yield (US10Y) rose 1 basis point to 4.14%%. The more rate-sensitive short-term 2-year yield (US2Y) rose 5 basis points to 4.36%.
See how Treasury yields have fared along the curve on the Seeking Alpha bonds page.