4:14pm: Ford shares tumble 10%
The Dow closed Friday down 367 points, 1.1%, at 32,418, the Nasdaq Composite added 47 points, 0.4%, to 12,643 and the S&P 500 dipped 20 points, 0.6%, to 4,117. The small-cap Russell 2000 index lost 22 points, 1.3%, to 1,635.
The major indexes all fell more than 2% on the week, with the S&P 500 slipping into correction territory by falling 10% from its 2023 high point in July.
“We still have a shaky economic outlook," said Dave Sekera, chief US market strategist at Morningstar. "So while the third quarter GDP print was extraordinarily high, I think everybody still expects that the US economy is going to slow down. The only question there is how much is it going to slow down and how fast."
Meanwhile, shares of Ford fell more than 10% after the automaker's third-quarter result missed expectations. The company also pulled its guidance for the year due to the UAW strike.
12:05pm: Nasdaq still on track for 2% weekly loss
US stocks were mixed in noon trading as better-than-expected results from Amazon and Intel were tempered by a month-over-month increase in the Personal Consumption Expenditures (PCE) index.
At midday, the Dow lost 144 points to 32,640 while the S&P 500 added seven points at 4,144 and the tech-heavy Nasdaq gained 145 points to 12,741.
"I think the idea that these dips are gonna be long and sustained is harder to argue for when there’s a lot of cash sitting on the sidelines," Bank of America head of US equity and quantitative strategy Savita Subramanian said.
Notable movers included shares of Ford Motor Co, which fell 9% after the automaker missed third-quarter earnings expectations and cut its guidance for the year, citing the UAW strike.
9:45am: Amazon fires up the Nasdaq in mixed start on Wall Street
US stocks made a mixed start on Friday with Amazon spurring a rally in tech stocks while blue-chips edged lower despite an encouraging inflation reading.
Shortly after the opening bell, the Dow Jones Industrial Average was down 70.87 points, 0.2%, at 32,713.43, the S&P 500 was up 5.96 points, 0.1%, at 4,143.19 and the Nasdaq Composite was up 101.21 points, 0.8%, at 12,696.82.
Figures showed the Federal Reserve's preferred inflation measure hit a two-year low, cooling in September.
The “core” personal consumption expenditure index, which strips out volatile items such as food and energy, fell to an annualised rate of 3.7%, from a downwardly revised figure of 3.8% in August, the lowest level in two years.
Headline PCE remained unchanged at an annualised rate of 3.4%, owing to higher prices for petrol and services.
On a monthly basis, personal consumption expenditures increased 0.4%, above forecasts of 0.3%, in September from August while core personal consumption expenditures rose 0.3%, quickening from a 0.1% rise.
ING Economics said the figures showed inflation remains “somewhat sticky,” with the core personal consumer expenditure deflator coming in at 0.3% month-on-month/3.7% as expected.
But it noted this follows three months where it has averaged 0.17% month-on-month, “which is exactly what we'd need to see over time to take us back to the 2% year-on-year rate that the Federal Reserve is targeting.”
“As such, it's a little disappointing – but with the Fed acknowledging the recent tightening of financial conditions brought about by the spike in Treasury yields and Fed Chair Jerome Powell’s recent comments that “given the fast pace of the tightening, there may still be meaningful tightening in the pipeline”, we continue to believe the Fed is finished hiking rates,” it said.
ING said the report also showed intensifying concerns are now coming to the fore over the path for real household disposable income – the key driver of consumer spending.
“Unless this turns around rapidly, recession will start to look more likely and inflation will fall more rapidly than the Federal Reserve expects,” it said.
Away from the economic data, and the market gave a warm reaction to results from Amazon, up 7.2%, and Intel, up 10.9%.
Oil majors Chevron and ExxonMobil were down 4.8% and 0.8%after their respective numbers.
7:00am: Nasdaq to rally as Amazon and Intel lift the mood
US stocks are expected to open on the front foot after Amazon brought some much needed cheer to technology stocks, although investors will also be keeping a wary eye on a key inflation gauge.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% higher, while those for the S&P 500 were up 0.5%, and contracts for the Nasdaq 100 futures rose 0.9%.
After a torrid week, tech stocks look set to bounce, with Amazon up 6.3% in pre-market trading after third quarter revenue and profits topped forecast.
AJ Bell investment director Russ Mould said: “A steady performance from the e-commerce and, particularly, the AWS cloud business helped reassure investors.”
“AWS is the real profit engine of the group and there was a risk an uncertain economic backdrop might have affected demand from clients. Solid sales and margins here will therefore be positively received,” he felt.
Intel also lifted the tech world after its strong results after the close Thursday, with shares up 7.2% ahead of the open.
Aside from earnings, the other early focus will be the core personal consumption expenditures index, the Federal Reserve’s preferred inflation measure, which is expected to have accelerated 0.3% in September, following a 0.1%rise in August
That would bring the annualised rate down to 3.7% from 3.9|%.
Headline PCE is also expected to increase 0.3% on a monthly basis, taking the annual rise to 3.4% from 3.5%.
Other stocks to watch include Ford which is down 3.5% after missing third-quarter earnings expectations and pulling guidance for the year, citing the UAW strike.
Oil majors, Exxon Mobil and Chevron dominate the earnings picture on Friday.