All three top US equity tickers fell on Friday in the wake of markets fully pricing in a December rate hike, but they still managed to gain on the week in an extension of the “Trump trade”, albeit far less than a week ago.
The S&P 500 index closed down 0.2% at 2181, having flirted with a fresh record high intraday. Over the week, the market bellwether rose by 0.8%, but that was a far smaller increase than the 3.8% achieved in the week to last Friday when markets were still digesting which sectors will win following Donald Trump’s surprise presidential election victory.
Retailer Gap (NUSE:GPS) was the biggest faller after saying it would be forced into more store closure than expected. Its shares ended down 16.6% at $25.61.
The Dow Jones Industrial Average and the Nasdaq Composite also ended the week in positive territory albeit at a slower pace, rising 0.1% and 1.6% on the week respectively.
At least the Nasdaq Composite managed to touch a record high in morning trading before receding.
Outside of the top tickers, the S&P Midcap 400 closed up 0.04% at 1605 and up from 1568 at the start of the week, while the S&P Smallcap 600 soldiered 0.5% higher to 803, and up from 785 on Monday.
The wider small-cap Russell 2000 ended up 0.5% at 1315 – but up from 1283 where it started the week.
Meanwhile, Toronto’s TSX Composite ended up 0.3% at 14,864.
After Wall Street’s closing bell on Friday, Facebook (NASDAQ:FB) announced a surprise share buyback scheme, saying it would repurchase up to $6bn of its stock beginning early next year.
In a regulatory filing, Facebook said that the board had approved the buyback on Friday. It will begin in the first quarter of 2017.
The move is an unusual one for a company like Facebook. Capital return programmes are often associated more closely with older, slower-growth companies that are trying to attract a different kind of investor. Alphabet, Google’s parent, did not begin repurchasing shares until last year.
Markets will be keen for more information next week, especially in case Facebook is trying to protect shareholder value in the wake of Donald Trump’s presidential election victory. Trump has vowed to get tough with the technology sector.
Facebook shares, which closed down 0.7% at $117.02 on Friday were indicated up 0.9% at $118.10 in after hours trading.
Early trading
US stocks were lower on Friday, as fresh record highs proved elusive in the wake of more hawkish comments from the Federal Reserve.
The Nasdaq Composite spiked at the open to a record high of 5,346.80, before sliding since then to 5318, down 0.3%.
The market bellwether S&P 500 also spiked but not by the 10 points it needed to achieve the same feat. It too then slid and was down 0.3% at 2181.
Kansas City Federal Reserve president Esther George has said policymakers should move to raise rates “sooner rather than later” to avoid overheating the economy.In remarks made in Houston on Friday, George – one of the Fed’s most hawkish policymakers – warned against the risk of waiting too long to raise rates.
The top faller, after warning it must close more stores than planned, was retailer Gap Inc (NYSE:GPS) down 12% to $27.04.
Meanwhile, more disappointing results from teen apparel retailer Abercrombie & Fitch (NYSE:ANF) down 13.4% to $14.67, and the biggest decliner on the S&P Smallcap 600 index.
The S&P Midcap 400 was flat at 1605 while the S&P Smallcap 600 managed to muster some gains, of nearly 0.1% to 800.
Meanwhile, German carmaker Volkswagen (OTCMKTS:VLKAY) is cutting 30,000 jobs as it tries to boost profits in the wake of a huge emissions scandal.
Europe's largest automaker says the cuts are needed to reduce costs as it works to overhaul its plants in Germany.
The vast majority of the job cuts -- 23,000 -- will come in its home market. Volkswagen employs more than 610,000 workers worldwide. Its ADRs were down 1.4% to $27.10.
Meanwhile, another German brand with a US listing was in the headlines. Deutsche Bank (NYSE:DB).
Deutsche Bank chief executive John Cryan has branded global banking rules as “only for the benefit of the US”, in the latest sign of mounting concern in Germany ahead of a key meeting aimed at harmonising transatlantic banking standards.
The comments came as the bank still wrangled with US regulators over a mis-selling fine of $14bn.
Deutsche’s ADRs were down 1.2% to $15.90.
Pre-Open
US stocks are expected to open little changed on Friday, according to predictions from the pit. But with a wave of retail stocks heading south, can tickers go any higher and claim fresh record highs for all the top trio: S&P 500, Dow Jones Industrial Average and Nasdaq Composite?
The S&P 500 market bellwether future is indicated flat.
All three top US equity tickers fell on Friday in the wake of markets fully pricing in a December rate hike, but they still managed to gain on the week in an extension of the “Trump trade”, albeit far less than a week ago.
The S&P 500 index closed down 0.2% at 2181, having flirted with a fresh record high intraday. Over the week, the market bellwether rose by 0.8%, but that was a far smaller increase than the 3.8% achieved in the week to last Friday when markets were still digesting which sectors will win following Donald Trump’s surprise presidential election victory.
Retailer Gap (NUSE:GPS) was the biggest faller after saying it would be forced into more store closure than expected. Its shares ended down 16.6% at $25.61.
The Dow Jones Industrial Average and the Nasdaq Composite also ended the week in positive territory albeit at a slower pace, rising 0.1% and 1.6% on the week respectively.
At least the Nasdaq Composite managed to touch a record high in morning trading before receding.
Outside of the top tickers, the S&P Midcap 400 closed up 0.04% at 1605 and up from 1568 at the start of the week, while the S&P Smallcap 600 soldiered 0.5% higher to 803, and up from 785 on Monday.
The wider small-cap Russell 2000 ended up 0.5% at 1315 – but up from 1283 where it started the week.
Meanwhile, Toronto’s TSX Composite ended up 0.3% at 14,864.
After Wall Street’s closing bell on Friday, Facebook (NASDAQ:FB) announced a surprise share buyback scheme, saying it would repurchase up to $6bn of its stock beginning early next year.
In a regulatory filing, Facebook said that the board had approved the buyback on Friday. It will begin in the first quarter of 2017.
The move is an unusual one for a company like Facebook. Capital return programmes are often associated more closely with older, slower-growth companies that are trying to attract a different kind of investor. Alphabet, Google’s parent, did not begin repurchasing shares until last year.
Markets will be keen for more information next week, especially in case Facebook is trying to protect shareholder value in the wake of Donald Trump’s presidential election victory. Trump has vowed to get tough with the technology sector.
Facebook shares, which closed down 0.7% at $117.02 on Friday were indicated up 0.9% at $118.10 in after hours trading.
Early trading
The Dow Jones is just 30 points away from its highest-ever level, and the S&P 500 and Nasdaq need less than 10 points to hit new record highs.
Tugging to the downside, US retailer Abercrombie & Fitch Co. (NYSE:ANF) was down 9.9% at $15.25 pre-market after warning of a challenging holiday quarter after reporting its 15th straight decline in quarterly sales, indicating that the teen apparel retailer's turnaround efforts had failed to attract shoppers.
Gap Inc (NYSE:GPS) shares were down 7.2% at $28.50 pre-market after the clothier said it expected a further drop in customer traffic during the crucial holiday shopping season and would shut more stores than forecast previously and that it expected a further drop in traffic during the crucial holiday shopping season.
Meanwhile, Foot Locker, Inc. (NYSE:FL) shares down 1.4% at $70.35 before the bell. That came despite reporting overnight that robust demand for high end basketball and running shoes has helped Foot Locker deliver another strong set of results for the third quarter and further underscores the resilience of the athletics footwear market at a time when many apparel retailers are struggling.
For the three months to October 29, like-for-like sales – an important industry metric – rose 4.7 per cent as customers snapped up new Nike Air Jordan shoes and the latest Stephen Curry sneakers.
Meanwhile, German carmaker Volkswagen (OTCMKTS:VLKAY) is cutting 30,000 jobs as it tries to boost profits in the wake of a huge emissions scandal.
Europe's largest automaker says the cuts are needed to reduce costs as it works to overhaul its plants in Germany.
The vast majority of the job cuts -- 23,000 -- will come in its home market. Volkswagen employs more than 610,000 workers worldwide. On Thursday ADRs ended up 0.6% at $27.48.
Meanwhile, another German brand with a US listing was in the headlines. Deutsche Bank (NYSE:DB).
Deutsche Bank chief executive John Cryan has branded global banking rules as “only for the benefit of the US”, in the latest sign of mounting concern in Germany ahead of a key meeting aimed at harmonising transatlantic banking standards.
His remarks may prove unhelpful as the frustrated bank continues to try to mitigate a $14bn fine landed on Deutsche Bank by US regulators over the 2008 financial crisis. Although perhaps his volley will help break the deadlock – as the bank was indicated up 0.7% at $16.20 before the bell.
This week, for Royal Bank of Scotland (NYSE:RBS) there was speculation on what the size of fine to be similarly meted out to it in the United States might be. RBS shares were down 1.6% at $5.06 pre-market.
But there was also some positive news around. salesforce.com, inc. (NYSE:CRM) shares were uyp 6.1% at $79.79. pre-market after beating third quarter earnings forecasts. But we will need a few more salesforce.com’s to get the tickers to fresh highs this session.