Wall Street’s main indexes slipped on Friday as a slew of mixed earnings reports created uncertainty among investors. At the same time, concerns over the outlook for US interest rates and the economy added to the uncertainty.
Business Activity Accelerates, But Recession Fears Loom
The US business activity survey showed an 11-month high in April, contrasting with the signs that the economy was in danger of slipping into a recession due to cooling demand caused by higher interest rates. This has clouded the outlook for the Federal Reserve’s monetary policy.
Tech and Growth Stocks Weighed Down by Treasury Yields
U.S. Treasury yields rose following the survey, affecting major technology and growth stocks such as Apple Inc (NASDAQ:AAPL), Meta Platforms Inc (NASDAQ:META), and Microsoft Corp (NASDAQ:MSFT), which saw a decline of around 1% each.
Procter & Gamble Co Posts Positive Earnings
Meanwhile, Procter & Gamble Co (NYSE:PG) gained 3.8% after raising its full-year sales forecast on higher pricing. This boosted consumer staples stocks by 0.8%.
Healthcare Sector Gains on HCA Healthcare Inc’s Forecast
HCA Healthcare Inc (NYSE:HCA) jumped 5.7% after raising its results forecast for 2023. This move also lifted peers Tenet Healthcare Corp (NYSE:THC), Community Health (NYSE:CYH) Systems, and Universal Health Services Inc (NYSE:UHS) between 3.2% and 12%. The healthcare sector was among the top gainers, up 0.7%.
Fed Rate Hike Likely
Several Fed speakers this week supported another 25-basis-point rate hike by the US central bank when it meets next week. Traders have priced in an 82% chance of such a move, with many expecting the Fed to hold before cutting rates by the end of 2023.
Dow Jones Up, S&P 500 and Nasdaq Down
US stocks have been range-bound this week as investors await clues on how far the Fed will hike interest rates. At 9:57 a.m. ET, the Dow Jones Industrial Average was up 2.19 points, or 0.01%, at 33,788.81, while the S&P 500 was down 6.19 points, or 0.15%, at 4,123.60. The Nasdaq Composite was down 46.79 points, or 0.39%, at 12,012.77.
Chilean Lithium Miner SQM Tumbles
US-listed shares of Chilean lithium miner SQM fell 9.3% after Chile’s president, Gabriel Boric, announced plans to nationalize the country’s lithium industry, transferring control of its vast operations from industry giants to a separate state-owned company. US lithium miner Albemarle Corp (NYSE:ALB) dropped 3.6%.
Declining Issues Outnumber Advancers
On the NYSE, declining issues outnumbered advancers by a 1.42-to-1 ratio, and on the Nasdaq, by a 1.30-to-1 ratio. The S&P index recorded 18 new 52-week highs and three new lows, while the Nasdaq recorded 27 new highs and 78 new lows.
Investors Awaiting Bullish Earnings
Adam Sarhan, chief executive of 50 Park Investments, said, “Investors are okay with earnings so far because the lack of bad news is good news. The market is waiting to see if we can get some bullish earnings over the next few weeks from some of the big cap tech stocks.”