Stocks experienced a mixed finish on Friday, relinquishing earlier gains as the anticipation for a robust quarterly earnings season was dampened by underwhelming results from major banks. Despite this, the S&P 500 managed to close the week in positive territory, marking a recovery from the challenging start to the year 2024.
The Dow Jones Industrial Average (^DJI) saw a decline of 0.3%, translating to a loss of over 100 points. In contrast, the benchmark S&P 500 (^GSPC) eked out a 0.1% gain, and the tech-heavy Nasdaq Composite (^IXIC) closed just above the flatline.
The initiation of fourth-quarter earnings by Wall Street lenders, viewed as a pivotal opportunity for stocks to rebound from this year’s earlier losses, brought forth results from key players such as JPMorgan Chase (JPM), Bank of America (BAC), and Wells Fargo (WFC). While JPMorgan Chase managed to post encouraging results, Bank of America and Wells Fargo faced share declines, failing to assuage concerns about potential challenges on the horizon.
Airline stocks bore the brunt of market punishment towards the end of the week, with United Airlines (UAL) witnessing a more than 10% drop, and American Airlines (AAL) and Delta (DAL) experiencing nearly 9% decreases. Delta, which disclosed its earnings earlier in the day, exceeded expectations for both revenue and profit. However, the company adjusted its 2024 earnings forecast downward, contributing to the market’s response.
On a contrasting note, Meta (META) underwent a remarkable turnaround, nearing a 52-week high in intra-day trading. This resurgence marked a significant recovery from the substantial drop in its stock price experienced in 2022, with the social media company now standing within 2% of its all-time high.
Another significant development revolved around oil prices, which surged more than 1% following the launch of airstrikes by the US and its allies against Houthi rebels in Yemen. The Iran-backed group, responsible for previous Red Sea attacks on shipping, responded with threats of reprisals. Brent futures (BZ=F) hovered around $80 a barrel, while West Texas Intermediate futures (CL=F) just fell short of $73.
Simultaneously, investors sought deeper insights into inflationary pressures following the hotter-than-expected December Consumer Price Index (CPI) reading on Thursday. Friday brought a turn of events, as the Producer Price Index unexpectedly revealed a decline in prices for the previous month. This unexpected development raised hopes that inflationary pressures might continue to subside in the coming months, offering a more optimistic outlook for the market.
In conclusion, despite the mixed performance in the market, the week concluded on a positive note with the S&P 500 firmly holding its ground in positive territory.
Source: Yahoo Finance
