5.10pm: Santa finally lands the sleigh
US stocks managed to find some festive spirit at the close of the final session before the holidays, with all three indexes managing to register gains, albeit having posted hefty losses in the run-up to the late, late Santa rally.
In choppy trading, the Dow Jones Industrial Average closed 176.44 points, or 0.5% higher on Friday to end at 33,203.93, while the S&P gained 0.6% to 3,844.82, and the tech-laden Nasdaq Composite rose 0.2% to 10,497.86.
Indexes started Friday lower after US Commerce Department figures showed that prices for services continued to climb faster than hoped last month.
But stocks edged into positive territory after the midmorning release of the University of Michigan’s consumer survey painted households as optimistic about the economy.
Still, a three-week string of losses for the S&P and the Nasdaq have set markets up to end 2022 with a down month. The S&P has given up 5.8% in December, while the Nasdaq has lost 8.5% and the Dow industrials 4%.
12:05pm: No Santa rally yet, but markets improve from the morning
At midday, the Dow was up 118 points, 0.4%, to 33,145, the Nasdaq Composite was down 10 points, 0.1%, to 10,466 and the S&P 500 added 13 points, 0.4%, to 3,836.
Investors are reacting to mixed economic data released this morning, and there's also less trading volume to go around before the holiday.
“Today, investors have to contend with a weaker-than-expected reading for durable orders that was offset by a softer-than-expected reading for the November PCE,” said Sam Stovall, chief investment strategist at CFRA Research, according to CNBC. “A pre-holiday trading day could be more volatile than normal, due to the light trading volume, which should carry over into the holiday-shortened week between Christmas and New Year’s,” he added.
As things stand, the benchmarks are set to have their worst month since September and their worst calendar year since 2008. For the month, the Dow is down about 4%, while the Nasdaq Composite and S&P 500 have lost 8% and 6%, respectively.
9.35am: Investors eye inflation data
US stocks opened mixed on Friday as new data showing inflation in the US is easing failed to stir up some Christmas cheer.
The PCE core price index, which is the Federal Reserve’s preferred measure of inflation, rose 5.5% year-over-year in November, and 0.1% from the previous month.
These were on par with the consensus analyst expectation per Bloomberg and showed a decline from October’s readings of 6.1% and 0.3% respectively.
Forex.com market analyst Fawad Razaqzada said optimism about inflation peaking may keep the downside risks limited, but that was all he could think of as something that could provide support for stocks.
“However, you can argue that at least some of this peak-inflation narrative is already priced in after the markets surged higher from their October lows,” he said.
“Without seeing a strong economic recovery to help boost revenue and profit for corporates, the equity markets will likely struggle to go higher in early parts of 2023.”
Just after the market opened, the Dow Jones Industrial Average had shed 29 points or 0.1% at 32,999 points and the Nasdaq Composite was down 25 points or 0.2% at 10,451 points while the S&P 500 was flat at 3,822 points.
6.30am: Better late than never
US stocks look set for a late Santa rally on the final trading day before the holidays having posted a very unseasonal hefty drop in the previous session as 2023 recession worries preyed on investors' minds.
Futures for the Dow Jones Industrial Average were 0.4% higher in pre-market trading on Friday, while contracts for the S&P 500 and the Nasdaq 100 both also added 0.4%.
On Thursday, the Dow Jones tumbled 348.99 points, or 1.0%, but finished well off its 803-point low. The S&P 500 and Nasdaq Composite dropped 1.5% and 2.2%, respectively.
The big falls came as concerns over recession revived, with investors worried that an overtightening of policy from central banks worldwide could force the economy into a downturn.
Investors await more US economic data on Friday, notably November’s personal income and consumption report, which includes the Federal Reserve’s preferred measure of inflation. November new home sales and December consumer sentiment index are also scheduled for release.
With the end of 2022 around the corner, stocks look poised to end three years of gains and post their worst yearly performance since 2008. For December, all major averages are on pace to snap two consecutive months of wins, with the Dow Jones down 4.5%, the S&P 500 off 6.3%, and the Nasdaq Composite down 8.7%, currently.