The stock market was set to fall for a third straight day on concerns that 2023 could bring a global recession and that central banks will continue to aggressively raise rates. parent on Facebook Meta Platforms ( META ) bucked the trend gaining nearly 3% with an improvement.
X
Indices were near session lows in late trading. The Nasdaq composite was down 1.1% while the S&P 500 was down 1.4% by late afternoon. The Dow Jones Industrial Average fell 1.6%. The small-cap Russell 2000 index fell 1.3%.
Volume fell on the Nasdaq but rose on the NYSE versus the same time on Thursday. Friday is the quarterly stock market event with options and futures expiring, commonly referred to as the “quadruple magic.” Market volume tends to be higher during those days.
On Friday, the S&P 500 followed the Nasdaq by falling below its 50-day moving average. The S&P is now at its lowest level since November 9.
The yield on the 10-year Treasury note rose 3 basis points to 3.48%. Crude oil prices fell 2.7% to $74.04 a barrel.
Innovator IBD 50 ETF (FFTY) fell 1.5%, led lower by biotech Pharmaceutical Catalyst (CPRX). It fell more than 6% below its cup-handled buy point of 16.76.
All 11 S&P sectors are down on Friday, led lower by the S&P Real Estate Select Sector ETF ( XLRE ), which fell 3.2% in late afternoon trading.
“Market volume increases during big expiration days and that can usually move a nervous market in one direction or another,” said Quincy Krosby, global chief strategist for LPL Financial. “Market participants continue to question whether the Santa Claus rally … will actually take place. The fact that the Senate passed a week-long funding bill to keep the government open until next Friday could also be the type of net event positive that cheer brings to the market”.
Next week marks the start of the Santa Rally seasonality for the stock market, peaking between Christmas and the first two trading days of 2023.
The stock market falls on weak business activity
The flash composite Purchasing Managers’ Index (PMI) fell sharply to 44.6, below November’s 46.4 number and well below the Econoday consensus forecast of 46.7. The flash PMI combines both manufacturing and services into one index.
Adding to investor worries about rising rates and a global recession, the European Central Bank said on Friday it would continue to raise rates by half a percentage point next year. The Bank of England was the only major central bank this week to signal caution about raising rates much higher, saying it believed the UK economy was already in recession.
Meta Platforms rose 2.8% after JPMorgan analyst Doug Anmuth raised the social media giant to an overweight rating and raised his price target to $150.
The analyst took an optimistic view after a dismal year, noting that “going into 2023, we believe some of these top- and bottom-line pressures will ease, and more importantly, Meta is showing signs encouraging increased cost discipline”.
Starbucks shares fall as workers begin 3-day strike
Tesla (TSLA) CEO Elon Musk banned high-profile and mostly liberal journalists from CNN, The New York Times and The Washington Post for publishing the real-time coordinates of his plane’s movements. Shares of TSLA sold off on Friday, falling more than 4% to the lowest level in more than two years.
Starbucks Shares ( SBUX ) gave up 1.8% as the stock has fallen three of five days this week, but remains above its 50-day moving average. SBUX stock is fading back into a buy zone from a bottom base cleared on November 9th. The buy point was 93.58.
A thousand Starbucks workers at 100 US stores nationwide are starting a three-day strike as a wave of unionization continues to hit corporate America. In a tweet on Friday, Starbucks Workers United described the three-day strike as the longest yet in its year-long union campaign. Starbucks says it negotiated in good faith.
The movers and shakers of the stock market
Nasdaq 100 component Adobe ( ADBE ) rose 3.2% after beating fiscal fourth-quarter 2022 revenue estimates. The desktop software maker gave upbeat guidance for the first quarter of 2023.
accentuation (ACN) on Friday reported fiscal first-quarter revenue and earnings that beat Wall Street targets. However, shares fell more than 5% after revenue guidance fell short of expectations. Exchange rates affected the company’s outlook.
Exact science (EXAS) fell 18% behind its rival Guardian Health (GH) revealed the results of a three-year trial of its blood-based test for colorectal cancer. Guardant’s results lagged those of rival Exact Sciences. GH fell 27% on the news.
American Steel (X) rose 5% after raising fourth-quarter EPS guidance above estimates. The stock is testing its 200-day line, which has been flat for months.
Follow Michael Molinski on Twitter @IMmolinski
YOU MIGHT LIKE:
Catch the next big winner with MarketSmith
Is it time to sell GLD stock as gold miners rally?
Get full access to IBD’s stock lists and ratings
Is XOM A Buy Now After Q3 Earnings?
Futures: Stocks Fall on Fed Outlook; Elon Musk sells more TSLA
