Stocks were down on Friday, as investors continued to seek a narrative for the markets.
By midday, the
Dow Jones Industrial Average
was down 106 points, or 0.3%. The index slipped 63 points on Thursday to close at 34,751. The
were down 0.6% and 0.7%, respectively.
Stocks have fallen of late, struggling to return to record highs. The S&P 500 is down 2% from its all-time high, hit on Sept. 2. Many companies have lowered their quarterly earnings estimates because they can’t access the supplies needed to meet demand. Firms are incurring higher costs as a result, a threat to profit margins. Thursday, U.S. retail sales beat expectations, a positive, but also a development that could make it more likely that the Federal Reserve will lower its bond purchases at a faster pace.
Investors are also paying close attention to when the Fed will lift short-term interest rates in response to inflation. The Federal Reserve holds its monetary policy meeting next week. The yield on the 2-year Treasury note rose to 0.23%, while the yield on the 10-year Treasury bond rose to 1.38%.
The retail sales data out Thursday was taken as “hawkish” for Fed policy, wrote Tom Essaye, founder of Sevens Report Research. Simply put, the data raise the likelihood of less economic support soon from the Fed.
Overall, some degree of indecisiveness seems to be prevailing in the market. The S&P 500 has largely remained on an upward path in the second half of the year, wrote Fiona Cincotta, senior financial markets analyst at City Index. But for the immediate term, the index is unlikely to push much past its all-time high of 4,536 until it rises about 0.6% above the index’s opening level Friday.
In the 13 trading day stretch ended Thursday, there have been only two days during which 70% or more S&P 500 stocks rose, according to Instinet data, compared to six days of such breadth in the prior 13 trading days.
Still, the index is trading at a level that doesn’t suggest a big correction is currently in the works, Cincotta said.
“It is becoming increasingly apparent that there is little in the way of direction for equity markets at the moment,” said Michael Hewson, an analyst at broker CMC Markets. “Investors are increasingly looking for a narrative, whether it be positive or negative to drive the next move, and are coming up empty-handed.”
Overseas, Hong Kong’s
Hang Seng Index
rose 1% as Chinese technology stocks surged, with the
Hang Seng Tech Index
rising 3.5% for one of its best days in the past month. The pan-European
was 0.9% lower.
Futures contracts for oil and iron ore were both declining. International oil benchmark Brent futures were down 0.7% to around $75 a barrel.
Here are 14 stocks on the move Friday
‘s asset management business.
China’s tech giants broadly rose in Hong Kong, with
(BABA) rising 2.2%,
(9888.H.K.) 2.4%, and
European travel stocks were buoyed amid reports that the U.K. would significantly loosen travel rules related to the Covid-19 pandemic. British Airways owner
(IAG.U.K.) climbed 4.9% as
InterContinental Hotels Group
(IHG.U.K.) lifted 2%.
(CBK.Germany) moved 1.2% higher, after local German media reported that U.S. private-equity group Cerberus was considering building a greater stake in the bank after the German elections later this month.
(3333.H.K.) dropped 3.8%, bringing weekly losses for the shares to 28.5%, as China’s embattled and highly indebted property giant remains under threat of restructuring.
Las Vegas Sands
(LVS) stock initially fell, then rose 1.6% after getting downgraded to Hold from Buy at Jefferies. The stock is down about 9% this week as potential Chinese regulation on the casino business has battered the stock. Earlier this week, Goldman Sachs analysts said most of the bad news was already reflected in the stock.
(WYNN) fell 0.4% on Friday, as losses have begun to moderate. The stock is down more than 17% this week.
(LNC) stock rose 2.8% after the company announced a $9.4 billion reinsurance agreement with a division of Denver Insurance Company.
(ORLY) stock fell 0.6% after getting downgraded to Neutral from Buy at Bank of America.
Read More: Stocks Are Slipping, but China Tech Surges