4:05pm: US stocks slide after record day
Wall Street retreated on Friday afternoon after Federal Reserve Chair Jerome Powell commented that the central bank was "on track to begin a taper of our asset purchases that, if the economy evolves broadly as expected, will be completed by the middle of next year" at a virtual event hosted by the South African Reserve Bank Friday.
Investors reeled, sending the S&P 500 and the Nasdaq lower despite the former reaching a record intraday high.
The S&P 500 finished the day at 4,545 points, a loss of 0.11%, while the Nasdaq took a hammering, dropping 0.82% to close at 15,090 points.
The Dow was the outlier, finishing the day in the green with 35,677 points, a gain of 0.21%, for an all-time high.
12:05pm: US markets enter record territory
The S&P 500 continued to ascend to new heights on the last trading day of the week, positivity in energy stocks and banks helped push the index to 4,559 during morning trading. By midday the S&P slipped 19 points (0.43%) to sit at 4,530.
The Dow Jones Industrial Average also registered a fresh high on Friday, climbing to 35,762 after the bell. The level proved unsustainable as the DJIA slipped 27 points (0.08%) by noon to hold at 35,576.
While the two leading indexes made weekly gains, the tech-weighed NASDAQ was on the decline as tech stocks underperformed. During morning trading it shed 166 points (1%) to sit at 15,052
As Chris Beauchamp, chief market analyst at IG, pointed out in a market note Friday, the upbeat mood of the Dow and S&P has also “awoken lacklustre” European markets. Most notably, the FTSE 100 which registered an afternoon uptick.
“The move has been almost entirely one-way this week on Wall Street, which has once more outpaced its European rivals,” he wrote. “Earnings season continues to provide the fuel for this move, as stocks take advantage of lowered expectations, but even leaving the game of expectation management aside, the overall fundamentals remain strong.”
The analyst expects the tech sector to be a topic of discussion for investors in the week ahead, as earnings for the space begin to roll out.
“This is the opportunity for the NASDAQ to catch up with the S&P 500, and a strong set of numbers here would turn reporting season from ‘good’ to ‘great’, fuelling additional equity gains,” said Beauchamp.
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9:45 am: US equities start on a mixed footing
US stocks started Friday on a mixed footing following weakness in some tech stocks.
Shares of Intel retreated more than 10% following a weaker-than-expected sales report. The semiconductor company blamed an industry-wide chip shortage for its revenue miss.
Social media stocks also dropped after Snap said its advertising business declined due to Apple’s privacy changes. Snap shares sunk more than 20%. Facebook and Twitter pulled back 4% and 2%, respectively.
Recently, the Dow Jones Industrial Average rose 136 points, or 0.38%, to 35,737. The S&P 500 increased 2 points, or 0.04%, to 4,552.
The tech-heavy Nasdaq fell 64 points, or 0.43%, to stand at 15.150.
6.30am: US stocks seen opening down
US stocks are expected to ease back at the end of a busy week as investors eye further corporate earnings and US manufacturing and services purchasing managers indexes (PMI) for October.
Futures for the blue-chip Dow Jones Industrial Average were flat, but those for the broader S&P 500 edged down 0.1% after the index posted a seven-day winning streak and ended at a record close on Thursday. Contracts for the tech-laden Nasdaq-100 futures fell 0.5%.
Stocks have risen in recent days on the back of strong corporate earnings, shaking off concerns about inflation and supply-chain problems that threaten the post-coronavirus pandemic economic recovery.
American Express and Honeywell International are among companies set to report earnings ahead of the opening bell on Friday. Nearly nine out of 10 US companies that have reported have beaten Wall Street expectations so far this earnings season.
The latest US manufacturing and services PMIs, due at 9.45am ET, are expected to show little change from September. Eurozone manufacturing activity largely held up in October, although service sector activity was weaker than economists had forecast, as shown in PMIs reported earlier on Friday.
On commodity markets, gold prices rose 0.7% in Friday trading.
Walid Koudmani, XTB market analyst commented: "While gold has experienced some significant volatility in recent times with the price fluctuating within a $40 range, the latest pullback of the US Dollar has favoured the precious metal and helped it recover. Gold is once again approaching the upper limit of the recent trading range as moods in markets remain uncertain after mixed European PMI’s and ahead of US data.
"While the price is up almost 1% from yesterday’s low, the $1800 area acted as a resistance in the past and could be an important level to keep an eye on moving forward, particularly if the situation in stock markets were to change."