The New York Stock Exchange ended mixed on Friday, failing to bounce back after Thursday’s losses as investors lacked confidence and the market became more volatile due to technical factors.
The Dow ended the session down 0.13%, while the tech-heavy Nasdaq gained 1.43% and the broader S&P 500 gained 0.22%.
For Kim Forrest of Bokeh Capital Partners, the approach of the long holiday weekend, when markets are closed on Monday, reduced the number of traders on Friday, putting pressure on Wall Street’s ability to find a clear direction.
In addition, Friday corresponds to the expiration of options, financial products that can bet up or down on the evolution of stocks and indices.
This “witch’s day” has traditionally been a source of heightened volatility, as traders put it.
“The day was a bit of a waste,” says Kim Forrest, “though it’s always a good thing to end.»
Karl Haeling of LBBW said: “The market has fallen a lot, but not enough to call a bottom, so we are doing some technical breakouts.”
For the week, the S&P 500 is down 5.79%.
“There’s a lot to digest,” he continued, “and it’s messy.”
In a week, New York markets were hit by a wave of panic sparked by Friday’s higher-than-expected price index, a sharp interest rate hike by the U.S. central bank (Fed) and the prospect of a possible recession.
Hopes for a strong technical rebound on Friday were also dampened by a slew of disappointing indicators that bolstered arguments for an ongoing U.S. economic slowdown.
Compared with April, U.S. industrial production rose just 0.2% in May, below economists’ expectations for a 0.5% increase.
Another disappointment was that capacity utilization only edged up to 79.0% (78.9% in April), compared to expectations of 79.3%.
This situation was further deepened by the Conference Board Institute’s survey, which showed that 76% of 750 bosses surveyed globally believe a recession is imminent, or already in effect.
“Everyone is worried about a recession next year, but we may already be in one,” Karl Haeling remarks, recalling that U.S. gross domestic product (GDP) has contracted in the first quarter, while the Fed’s Atlanta office Growth forecast for the second quarter has been cut to 0% from the current 0.9%.
In this climate of anxiety, bonds are once again favored by investors. The 10-year US government bond yield, which moved in the opposite direction of price, fell to 3.23% from 3.30%.
On the other hand, software publisher Adobe was sanctioned (-1.18% to $360.79) due to downward revisions to its forecast for lower turnover and net profit, especially due to the fallout of the war in Ukraine and Soaring impact on the dollar.
The Wall Street Journal reported that US drug company Merck (-0.32%) may acquire Biotech Seagen (up 12.72% to $165.45) after it was sought after.
Steelmaker US Steel (up 1.58% to $19.89) benefited from a profit posted after Wednesday’s close that was well above analysts’ forecasts.
Rising steel prices are not just offsetting soaring energy costs, the group said.
Cosmetics group Revlon took off (+91.28% to $3.73) two days after filing for bankruptcy, after the Economic Times daily published an article on a possible takeover by Indian conglomerate Reliance Industries.
Shares of WWE Group, which manages the World Wrestling Entertainment Wrestling Tour, fell (-3.64% to $62.51) after announcing that its iconic boss Vince McMahon had temporarily withdrawn over an investigation into an affair with an employee.
From Exxon Mobil (-5.77%) to Chevron (-4.57%), oil companies bore the brunt of the fall in black gold prices.