Dow closes 800 points higher on Friday, registers

Stocks rose on Friday despite a tumble in Amazon shares after economic data pointed to slowing inflation and a steady consumer.

The Dow Jones Industrial Average closaed 828.52 points, or about 2.6%, higher at 32,861.80. The S&P 500 added nearly 2.5%, to close at 3,901.06. The Nasdaq Composite ended up about 2.9%, to close at 11,102.45.

On a weekly basis, the major indexes made notable gains. It was the fourth positive week in a row for the Dow, a first since a five-week streak ending in November 2021. The 30-stock index is up 5.7% this week in its best performance since May. It’s also on track for its best month since January 1976.

The S&P 500 and the Nasdaq are up 3.9% and 2.2%, respectively, for the week.

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The stock market has fractured this week as investors dumped technology shares following weak results and outlooks from Microsoft, Alphabet and Meta and rotated into economically sensitive stocks that will benefit if the U.S. economy can skirt a recession.

At the same time, investors have found hope in data that came out over the course of the week indicating inflation may be easing, increasing optimism that the Federal Reserve could break from its trend of 75 basis point rate hikes after the November meeting.

“Inflation data really wasn’t that bad. The earnings have been not great, but not awful,” said Megan Horneman, chief investment officer at Verdence. “When you have that middle of the road, that helps equity markets.”

Amazon plunged by 6.8% after the company posted weaker-than-expected quarterly revenue and issued disappointing fourth-quarter sales guidance Thursday. Apple shares ended Friday up 7.5%. The tech giant reported weaker-than-anticipated iPhone revenue on Thursday, but beat Wall Street estimates for quarterly earnings and revenue.

Apple and other more positive performers, like Intel, have given investors footholds within what some see as a particularly tumultuous tech sector, subsequently providing upward pressure to the tech-heavy Nasdaq, said Jay Hatfield, CEO of Infrastructure Capital Management. He said the market was also boosted by oil giants Chevron and Exxon Mobil, up about 1.2% and 2.9%, respectively, after both reported beating expectations before the bell.

“Apple’s really the lone star, if you will, of the mega-cap tech stocks,” Hatfield said. “It’s just a unique market where bad is terrible, but OK is good, so, on a relative basis, it’s spectacular.”

The market got a boost after the core personal consumption expenditures price index in September increased 0.5% from the previous month and 5.1% from a year ago, still high but mostly in-line with expectations. This is the preferred gauge of inflation for the Federal Reserve. Personal spending rose 0.6%, more than expected, the data showed.

5 HOURS AGO

Coffee futures slumped this week, taking down an ETN that tracks your morning cup

December coffee futures fell 5.1% Friday to 169.8 cents a pound after touching 167.75 cents, the lowest since July 2021. Traders figured Brazil’s crop outlook is improving and a softer global economy might weaken demand.

For the week, coffee closed down 11.05%, the steepest weekly decline since Sept. 2020.

As a result, the Barclays iPath Bloomberg Coffee exchange traded note (JO) dropped 11% this week and 24% over the past month.

— Scott Schnipper, Gina Francolla

5 HOURS AGO

Caterpillar logs best week in over a decade

Wall Street may be worried about a looming recession, but one of the stocks most leveraged to the economy is on a hot streak.

Caterpillar finished the week up 15.3%, its best week since 2009.

That is due in part to a strong third-quarter report, where the machinery company beat Wall Street estimates for adjusted earnings and revenue. Caterpillar also gave upbeat guidance about the fourth quarter.

—Jesse Pound

6 HOURS AGO

Simplify launches two more income-focused ETFs

Income-focused ETFs have become increasingly popular as stocks have fallen and interest rates have climbed, and the space continues to expand.

On Friday, Simplify launched a Stable Income ETF (BUCK) and Enhanced Income ETF (HIGH). Both funds plan to sell option spreads on broad indexes in order to generate income and invest in short duration debt.

The new funds have an expense ratio of 0.36% and 0.51%, respectively.

Simplify is a smaller player in the ETF space, but its Interest Rate Hedge ETF (PFIX) has been one of the best products on the market in 2022. The fund has seen its price roughly double this year.

— Jesse Pound

6 HOURS AGO

S&P 500 nears 3,900

The S&P 500 has broken 3,900 points, and continues to fluctuate around that threshold, as markets near close.

If the index closes above 3,900 points, it would be the first time that level was hit since Sept. 15, when it closed at 3901.35.

— Alex Harring

6 HOURS AGO

CNN Fear & Greed Index hits its highest point since August

Maybe the market’s changing its mind?

CNN Business’ Fear & Greed Index, a measure of seven different market indicators, stands at its highest since the height of the August recovery that off the June lows.

On Friday, the index hit 61, the most since reaching 64 on August 19. The index gives each indicator equal weighting, with the cumulative reading calculating a score from 0 (maximum fear) to 100 (maximum greed). The seven components track market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility and demand for safe havens.

Nationwide’s chief of investment research Mark Hackett notes that “the tone of the market is shifting, with investor sentiment and momentum showing significant improvement, and the market higher in three of the past four weeks. While the fundamental picture remains challenged, technical rebounds almost always predate a fundamental turnaround, as investors realize that too much negativity is priced into markets.”

August 1982, anyone? That’s when stocks began to turn far in advance of improved economic numbers in 1983.

— Scott Schnipper, Jeff Cox

7 HOURS AGO

Meta downgraded by Edward Jones due to concerns over metaverse investment

Following disappointing earnings, Edward Jones downgraded Meta to a hold from a buy.

The firm said the tech giant’s plans for increasing spending on the metaverse was larger than originally anticipated. That elevated concerns over how long a return on investment will take.

To be sure, Edward Jones did report some potential tailwinds. It believes the company can see ad revenue, which is a hot topic this earnings season given its connection to total revenue, can return to growth by late 2023.

Earnings per share came in lower than expected, though the company did beat on revenue, according to its earnings report this week. Share values plummeted more than 20% on the news. They are down 70% so far this year.

— Alex Harring

7 HOURS AGO

Dow up more than 800 points entering final trading hour

The Dow was up 804 points, or 2.5%, heading into the final hour of trading.

The Nasdaq and S&P 500 also continued to rally, adding 2.7% and 2.4%, respectively.

— Alex Harring

7 HOURS AGO

Tech ETFs see big inflows despite earnings season struggles

A rough earnings stretch for Big Tech may have caused some big moves for stocks, but it hasn’t scared off investors from the space as a whole.

According to FactSet, the four biggest tech and consumer discretionary ETFs have seen positive inflows over the past week. Even the Ark Innovation ETF, seen as one of the riskier ways to bet on tech, has attracted significant money.

— Jesse Pound

7 HOURS AGO

Dow on track for best month in nearly half a century

The Dow is up slightly over 14% this month. If that performance holds, it would be the best month for the index in nearly half a century.

The Dow has added 14.06% compared to the start of the month, according to FactSet. The last time it saw a better month was in January 1976, when it had a gain of 14.41%.

Compared to prior Octobers, it is on track to be the best montly gain in any October since the index’s inception in 1896.

The Dow over the years

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Line chart with 172 data points.

The chart has 1 X axis displaying Time. Range: 1980-01-01 01:00:00 to 2022-10-01 00:00:00.

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