A man walks past an electronic stock board displaying Japan’s Nikkei 225 index at an investment firm in Tokyo on Friday. Stock markets in Asia fell overnight. Shuji Kajiyama/Associated Press
Equities ended a sluggish trading day on Friday with modest gains for the major stock indexes and ended a quiet week on Wall Street highlighted by a series of mostly mixed corporate earnings reports.
The S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite all gained 0.1% after oscillating between small gains and losses for most of the day. The indices each recorded a slight loss for the week.
Health care companies and a range of consumer goods makers gained ground, mitigating losses in banks, technology stocks and elsewhere. Truist Financial and KeyCorp, two of the larger regional banks, were among the biggest losers in the S&P 500. Truist fell 6% and KeyCorp closed 3.7% lower.
Bond yields have remained relatively stable. The 10-year Treasury yield, which drives mortgage rates and other borrowing, rose to 3.56% from 3.54% late Thursday.
Trading was muted as investors focused on the latest corporate earnings reports and forecasts to get a better sense of how companies are coping with high inflation, a slowing economy and recession fears.
“You have a market that’s in wait mode,” said Quincy Krosby, chief global strategist at LPL Financial. “It’s waiting for a sense of what we’re going to hear from companies.”
Investors reviewed a handful of earnings reports on Friday. Hospital operator HCA Healthcare rose 3.9% after the company beat estimates for the first quarter and raised its full-year earnings guidance. Procter & Gamble, the maker of Charmin toilet paper and other iconic consumer goods, rose 3.5% after beating estimates thanks to price hikes.
IT services company PC Connection fell 4.9% after giving investors a disappointing financial update. Regional bank Regions Financial fell 2.8% after reporting disheartening earnings.
Companies have beaten Wall Street forecasts so far this reporting period. Analysts had forecast that this would be the sharpest fall in S&P 500 earnings per share since the pandemic stunned the economy in 2020. Analysts polled by FactSet expect earnings for S&P 500 companies to contract by 6.3%.
Several large companies are on deck to report earnings next week, giving investors another tough few days of company updates. Coca-Cola reports its latest results on Monday, followed by McDonald’s and Google’s parent company Alphabet on Tuesday.
Airplane maker Boeing and Facebook’s parent company Meta Platforms are due to report results on Wednesday. Investors will learn more details about the health of the airline industry when American Airlines and Southwest Airlines report financial results along with internet retail giant Amazon on Thursday.
The busy week of earnings reports could help give investors more direction as recession worries linger, Krosby said.
“There’s a tug-of-war between what the economic data is saying and what the stock markets are saying,” she said.
The recent gains come as investors worry about the potential for a recession amid the Federal Reserve’s fight against inflation. The central bank has aggressively hiked interest rates through 2022 and 2023. Rate hikes have weighed on economic growth, and although inflation has eased, it remains high and is still depressing consumers.
The Fed will meet again in early May and is expected to raise interest rates by another quarter point. Wall Street is betting the Fed will pause from raising rates after this meeting.
The two-year Treasury yield, which is more in line with expectations for the Fed, rose to 4.17% from 4.16% late Thursday.
Wall Street is expecting more economic data next week that could provide a better insight into the impact of inflation and the trajectory of the economy. The reports will include April consumer confidence, first quarter gross domestic product and another update from the government on prices and inflation.
Overall, the S&P 500 rose 3.73 points to 4,133.52. The Dow added 22.34 points to close at 33,808.96. The Nasdaq rose 12.90 points to 12,072.46. Decliners had a slight advantage over winners on the New York Stock Exchange.
Markets in Europe also closed with modest gains on Friday, while stocks in Asia fell overnight.
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