Demonstrations on Wall Street to end the hectic week with the best day of the year

By Stephen Culp

NEW YORK (Reuters) – Wall Street rose on Friday, hitting its best day of 2022 after another zig-zag session, ending a tumultuous week marked by corporate profits, geopolitical turmoil and an increasingly aggressive Federal Reserve. giving.

The three major U.S. stock indices started the day in the red, but became increasingly green as the session progressed, with technology stocks rising the most.

The and the Dow had gains at last Friday’s close, but the Nasdaq was basically flat on a weekly basis, limiting over-five-day trading.

However, the “best daily earnings for the year” bar was relatively low. Even with Friday’s jump, the S&P 500 is down 7% so far in 2022, with Nasdaq and Dow falling 12% and 4.4% at the same time.

“Investors are trying to adapt to the impact of this higher rate cycle,” said Rick Meckler, a partner at Cherry Lane Investments in the New Vernon, New Jersey family investment office. “For some of them, stocks are still more attractive than bonds in an environment where the rate is rising, and they’ve been fishing where the bottom could be.”

“You’re seeing a stock hunt on a variety of stocks, especially on the Nasdaq,” Meckler added.

Economic data released on Friday showed a drop in consumer spending along with the lowest consumer sentiment in a decade, with year-on-year Core PCE prices – the Federal Reserve’s favorite inflation measure – standing at 4.9%, slightly warmer than expected.

The chart below shows how much core PCE and other important indicators have risen above the Fed’s annual average target of 2%.

(Chart: Inflation, https://graphics.reuters.com/USA-STOCKS/gdvzynqmopw/inflation.png)

At the end of a monetary policy meeting on Wednesday, the Fed made it clear that it intends to remove gloves and tackle persistent inflation by raising key interest rates more aggressively than many market participants expected.

They rose 564.69 points, or 1.65%, to 34,725.47, the S&P 500 105.34 points, or 2.43%, to 4,431.85, and 417.79 points added, or 3.13%, to 13,770.

Of the 11 major sectors in the S&P 500, all but one ended up green. Shares of technology were the clear winners, gaining 4.3%, the sector’s biggest one-day jump since April 6, 2020.

In the fourth quarter, the reporting season was in full swing, according to 168 companies in the S&P 500. Of these, 77% agreed with the results, according to Refinitiv.

But investors are increasingly focused on guidance, and how far they expect companies to fundamentally impact their ongoing global supply challenges.

“As we move into 2022, and as Omicron’s peak and weather improve, I hope to ease supply chain pressures,” said Ross Mayfield, an investment strategy analyst at Baird in Kentucky, Louisville. “(They) will probably have a peak this quarter, and ease throughout the year.”

Manufacturer of data storage equipment Western Digital (NASDAQ 🙂 reported headwinds in the supply chain after reporting lower-than-expected earnings and a disappointing outlook, with its stock down 7.3%.

The caterpillar Inc (NYSE 🙂 fell 5.2% after the equipment manufacturer warned that higher production and labor costs would put pressure on the profit margin.

Chevron Corp (NYSE 🙂 fell 3.5% in fourth quarter earnings.

However, the 7.0% jump in Apple (NASDAQ 🙂 gave the S&P 500 and the Nasdaq the biggest boost, with the company setting an iPhone sales record for the holiday quarter the next day.

Visa Inc. (NYSE 🙂 rose 10.6% as a result of increased spending on international travel and e-commerce after a quarterly earnings gain.

Progress issues outperformed NYSE declines with a ratio of 1.83 and 1; On the Nasdaq, ratios of 1.92 and 1 favored the advanced.

The S&P 500 posted a new 52-week high and a 24-day low; The Nasdaq Composite recorded 16 new highs and 753 new lows.

The volume of U.S. exchanges was $ 12.8 billion shares, compared to an average of $ 12.1 billion in a full session over the last 20 trading days.