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Stock Market News for Feb 13, 2023

Zacks Equity Research
·4 min read

U.S. stocks closed mostly higher on Friday with the S&P 500 managing to end in the green after recording gains in the late afternoon session as investors regained some confidence as economic data showed improvement in consumer sentiment. The Dow ended in positive territory but the Nasdaq closed in the red as Treasury yields pointed to higher interest rates.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.5% or 169.39 points to finish at 33,869.27 points.

The S&P 500 gained 0.2% or 8.96 points to end at 4,090.46 points. Energy stocks were the biggest gainers but the index was dragged down by consumer discretionary communication services and tech stocks.

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The Communication Services Select Sector SPDR (XLC) lost 1%. The Consumer Discretionary Select Sector SPDR (XLY) and Technology Select Sector SPDR (XLK) fell 1.2% and 0.5, respectively. The Energy Select Sector SPDR (XLE) rose 3.9%. Eight of the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq lost 0.6% or 71.46 points to close at 11,717.12 points.

The fear-gauge CBOE Volatility Index (VIX) was down 0.87% to 20.53. Decliners outnumbered advancers on the NYSE by a 1.03-to-1 ratio. On Nasdaq, a 1.35-to-1 ratio favored declining issues. A total of 10.43 billion shares were traded on Friday, lower than the last 20-session average of 11.85 billion.

Investors Weigh in Corporate Earnings, Economic Data

Wall Street closed mostly higher on Friday as investors weighed in corporate earnings from a fresh batch of companies, the latest report on consumer sentiment and comments from Fed officials who hinted at more interest rate hikes.

Economic data released on Friday showed that the preliminary consumer sentiment in February hit a 13-month high, indicating that although cautious, Americans are now more optimistic about the economy making a softer landing in 2023.

This gave investors’ confidence a boost but unimpressive quarterly earnings reports from a batch of companies dampened their spirits. Expedia Group, Inc. EXPE reported an earnings and revenues miss as its profit margin shrank. Expedia reported quarterly earnings of $1.26 per share, missing the Zacks Consensus Estimate of $1.85 per share.

Also, the company posted revenues of $2.62 billion for the quarter ended December 2022, missing the Zacks Consensus Estimate by 2.42%. Expedia has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Shares of Expedia declined 8.6% following this. The disappointing results from Expedia weighed on the consumer discretionary sector. Shares of Carnival Corporation & plc CCL fell 3.2%, while shares of The RealReal, Inc. REAL plummeted 6.6%.

Inflation data indicate that prices have been cooling off lately but the labor market is still tight. The latest non-farm payrolls released last week showed a record number of job additions to the worrying policymakers.

Although wages haven’t increased at the pace at which job additions have been made, wage growth is still high and the services sector has continued to perform well, which could pose as a problem when CPI data for January is released on Tuesday.

Tech stocks also took a beating on Friday as Treasury yield climbed once again. The 10-year Treasury yield rose 6.1 basis points 3.743% on Friday, while the two-year Treasury Yield climbed less than 1 basis point to 4.511%.

Economic Data

The University of Michigan’s preliminary report showed that consumer sentiment in the United States jumped to 66.4% to a 13-month high. However, the report also showed that the one-year inflation expectations increased to 4.2%, a development that could be worrying.

Weekly Roundup

All three major indexes registered weekly losses. The Dow closed 0.2% lower for the week. The S&P 500 was down 1.1% for the week, while the Nasdaq lost 2.4% for the week. The Dow ended lower for the second straight week, while the S&P 500 snapped its two straight weeks of gains.

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Zacks Investment Research