- Personal consumption expenditures inflated, consumer spending cooled
- Oil rises on supply concerns after Russia sanctions
- The S&P 500 and the Nasdaq are on their way to a third weekly loss
NEW YORK (Reuters) – Wall Street fell to a slightly higher close on Friday and Treasury yields advanced as investors digested a torrent of economic data ahead of the long Christmas weekend, capping a week filled with concerns about the Federal Reserve’s monetary restrictions. Politics and related recession fears.
The three major US stock indices ended the session in the green after most of the session had passed, as investors showed little conviction as a raft of indicators pointed to an economic downturn, evidence that the Federal Reserve’s barrage of interest rate hikes was having its intended effect.
“Everyone is waiting for 2023 to get a new experience again,” said Paul Kim, CEO of Simplify ETFs in New York.
Over the course of the week, the S&P 500 and Nasdaq posted their third consecutive losses from Friday to Friday.
As we approach the remaining trading days of 2022, all three indices appear poised to close the books on the biggest annual percentage drop since 2008, the darkest year of the global financial crisis.
Kim added, “This was the year that diversification and selling everything together failed; a year of extreme suffering, as both bonds and stocks sold off.” “There was nowhere to hide.”
A slew of data from the Commerce Department and the University of Michigan have shown that while inflation appears to be slowing, so is consumer spending, which accounts for about 70% of the US economy.
On the other hand, new home sales posted surprising gains and consumer confidence increased.
But the data did little to move the needle regarding the Fed’s policy outlook.
“Inflation appears to be more or less flat and interest rates continue to rise,” Kim said. “The bottom line is (interest) rates should be higher for longer.”
The Dow Jones Industrial Average rose 176.44 points, or 0.53%, to 33,203.93 points, the Standard & Poor’s 500 Index rose 22.43 points, or 0.59%, to 3,844.82 points, and the Nasdaq Composite Index increased 21.74 points, or 0.21 points. %, to 10,497.86.
European stocks followed their US counterparts up and down, eventually ending the session nominally higher as economic jitters grappled with strength in healthcare and banking stocks.
The pan-European STOXX 600 index (.STOXX) rose 0.04% and the MSCI worldwide stock index (.MIWD00000PUS) rose 0.23%.
Emerging market stocks lost 0.99%. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 1.1% lower, while Japan’s Nikkei (.N225) lost 1.03%.
Treasury yields resumed their upward trajectory after data showed personal income rose more than expected and inflation data for October was revised upward.
The benchmark 10-year note fell 22/32 to 3.7509% from 3.671% late Thursday.
The 30-year note fell 61/32 to 3.8269% from 3.724% late Thursday.
The dollar fluctuated but remained essentially unchanged against a basket of global currencies after two days of gains as market participants weighed the possibility of higher interest rates and staying there longer than many had hoped.
The dollar index fell 0.11 percent, with the euro rising 0.22 percent to $1.0616.
The Japanese yen fell 0.36% against the dollar at 132.85 per dollar, while the pound sterling was last traded at $1.2045, up 0.02% on the day.
Oil prices jumped after Moscow announced that it may cut its crude production in response to a G7 cap on Russian exports.
US crude rose 2.67 percent to settle at $79.56 a barrel, while Brent crude settled at $83.92 a barrel, up 3.63 percent during the day.
Gold advanced amid dollar weakness ahead of the long weekend.
Spot gold rose 0.3 percent to $1,797.42 an ounce.
(Reporting by Stephen Kolb) in New York. Additional reporting by Hugh Jones in London. Editing by Matthew Lewis, Jonathan Otis, and Josie Kao
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