Wall Street’s tough week eases at the end
NEW YORK – The toughest week for Wall Street in nearly two months came to a quiet end on Friday, as stock indexes drifted to a mixed finish.
The S&P 500 rose 0.2%, but it still ended the week with a drop of 1.1%, which was its worst since December. The Dow Jones Industrial Average gained 169 points, or 0.5%, while the Nasdaq composite fell 0.6%.
Stocks have been struggling since rallying in January on hopes that the economy could avoid a severe recession and that cooling inflation could get the Federal Reserve to take it easier on interest rates. Worries have worsened recently that a still-strong jobs market could push upward on inflation and keep rates at a higher-for-longer level, much as the Fed has been warning.
Higher rates can drive down inflation, but they also raise the risk of a recession and drag down investment prices. And central banks around the world are intent on tightening the screws by raising rates further, even if at a slower pace than before.
Investors will get more updates on inflation next week when the government gives its latest monthly updates on prices at both the wholesale and consumer levels.
The worries about rates mean much of Wall Street’s action has been in the bond market, where yields have climbed on expectations for a firmer Fed. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, rose to 3.73% from 3.66% late Thursday.
The two-year yield, which moves more on expectations for the Fed, ticked up to 4.50% from 4.48%. It was at 4.08% just over a week ago and is near its highest level since November.
Companies in recent weeks have been delivering a mixed set of earnings reports for the end of 2022.
Lyft tumbled 36.4% following its latest report. The ride-hailing company gave a forecast for revenue in the first three months of 2023 that fell short of analysts’ expectations.
News Corp. fell 9.4% after the owner of The Wall Street Journal and other media reported weaker quarterly results than expected. It also said it will cut 5% of its workforce in 2023 as it contends with higher interest rates and inflation.
Expedia lost 8.6% after reporting weaker profit and revenue for the latest quarter than expected.
On the winning side of Wall Street were energy stocks, which rose with the price of crude oil. Valero Energy gained 6.1%, and Marathon Oil climbed 6.2%.
Oil prices rose after Russia said it will cut oil production by 500,000 barrels per day next month. Western countries had capped the price of Russia’s crude over its invasion of Ukraine.
All told, the S&P 500 rose 8.96 points to 4,090.46 Friday. The Dow gained 169.39 to 33,869.27, while the Nasdaq fell 71.46 to 11,718.12. The Russell 2000 index of smaller companies rose 3.47 points to 1,918.81.