4:11pm: Dow falls for the eighth week in a row
The Dow closed Friday 9 points higher at 31,262, the Nasdaq lost 34 points, 0.3%, to 11,355 and the S&P 500 improved by 0.6 points to 3,901.
The S&P 500 briefly dipped into bear market territory (20% below its all-time high) but ended the day 19% below its record after a late-session turnaround. The S&P and Nasdaq each lost ground for the seventh consecutive week. The Dow, meanwhile, has dropped for eight-straight weeks.
"Like the rest of the US indices, the Dow is making lower lows and lower highs and as such we continue to remain bearish on the markets," FOREX.com market analyst Fawad Razaqzada Market Analyst wrote Friday. "Though we will see oversold bounces here and there, the underlying trend is bearish and as such we expect resistance levels to hold and supports to break down until something changes fundamentally. From here, a revisit of last week’s low at 31,226 seems highly likely."
12:05pm: US stocks dip into the red
After starting the day in the green, US stocks had fallen at midday with all three major indices on track for yet another week of steep losses as disappointing retail earnings highlight the continued impact of high inflation.
At noon, the Dow had shed 233 points at 31,019 points.
The S&P 500 was down 35 points at 3,886 points while the Nasdaq had slipped 140 points to 11,247 points.
IG chief market analyst Chris Beauchamp said China’s overnight rate cut had boosted sentiment, but investors remained nervous about diving back into stocks after this week’s volatility.
“It has been another see-saw week in markets, as a rally in the first part of the week turned to dust in the second,” Beauchamp said.
“With US markets already shedding initial gains, the picture remains uncertain.”
CMC Markets UK chief market analyst Michael Hewson added that despite today’s early rebound, US markets were on course for their seventh successive weekly decline.
In terms of major movers, following in the footsteps of other retailers Walmart Inc (NYSE:WMT) and Target Corporation (NYSE:TGT) this week, Ross Stores (NASDAQ:ROST) Inc has tumbled by more than 22% to about $72 a share at noon after the company reported disappointing quarterly results.
“Its shares have plunged after the discount chain cut its full year outlook as Q1 results fell short of expectations. This has translated into weakness in the likes of Burlington Stores and TJX, owner of TJ Maxx,” Hewson said.
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9:40am: US stocks open in positive territory
US stocks opened higher on Friday as bargain hunters swoop in following the significant sell-off that has occurred over recent weeks.
Just after the open, the Dow had gained 198 points at 31,451.
The S&P 500 was up 35 points at 3,936 points, with the Nasdaq up 139 points at 11,527 points.
OANDA senior market analyst Craig Erlam noted equity markets were back in positive territory but that he was struggling to be too excited by the moves going into the weekend.
“The rebound may partly reflect the scale of the declines we've seen in the previous couple of sessions, while the cut to the five-year loan prime rate in China may also be giving global markets a bit of a lift. But ultimately, very little has changed and I expect that will continue to hold these markets back,” Erlam said.
6.30am: Share price gains seen
US stocks were expected to open higher on Friday, clawing back some of the recent sharp falls as bargain hunting emerges to shore up prices.
Recent concerns remain, however, and worries that the global economy may slide into a recession amid runaway inflation and rising interest rates are likely to keep trading volatile.
Futures for the Dow Jones Industrial Average were up 0.9% in pre-market trading, while those for the broader S&P 500 index rose 1.1% and the tech-heavy Nasdaq gained 1.6%.
“US equities closed Thursday’s session in the negative following a choppy trading session, as investors’ hearts pounded between buying the dip or selling further on recession fear,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “The S&P500 is a stone’s throw from stepping into a bear market, and if the index closes the week lower, it would be the longest losing streak since the dotcom crisis. And there is nothing (US Fed Chairman) Jerome Powell will do to save the day.”
Thursday’s falls come after the intense sell-off on Wednesday, their worst in two years, after large US retailers report weak earnings on the back of rising costs, sluggish sales and supply-chain disruptions.
A surprise interest rate cut in China appears to have lifted global market sentiment at least for now as investors hang on to hope that economic growth in the world’s most populous nation may not slow as much as previously expected. Still, China’s room for maneuver is limited given its tough Covid-related measures and the possibility that growth elsewhere may falter as central banks raise interest rates to fight inflation.
Elsewhere, gold, a safe haven in times of uncertainty, was up 0.2% at $1,844.6 an ounce.
Oil prices were a touch lower but still well-supported above the $100 a barrel level. WTI crude oil futures were down 0.3% at $109.57 a barrel and Brent crude futures shed 0.1% at $111.93.
Contact the author at jon.hopkins@proactiveinvestors.com