Major Indexes Finish Near Session Lows on Witching Friday Ahead of Fed Meeting
Dow Jones Industrial Average
The Dow Jones Industrial Average failed to reclaim its 50-day moving average and fell nearly 300 points, finishing 0.8% lower at 4 p.m. ET.
S&P 500 and Nasdaq Composite
The S&P 500 and Nasdaq composite suffered a harsher fate and fell 1.2% and 1.6%, respectively on Friday. Both indexes finished near session lows and below their 50-day moving average.
Federal Reserve Meeting
The Federal Reserve will hold a two-day meeting next week to make a rate decision. According to CME FedWatchTool, the odds of rates remaining unchanged are an overwhelming 97%. The current target rate is 5.25%-5.5%.
Tech Stocks Drag Down Nasdaq
Tech stocks dragged the Nasdaq lower after Taiwan Semiconductor (TSM) asked for a delay in chip equipment deliveries. Super Micro Computer (SMCI), Axcelis Technologies (ACLS), KLA (KLAC) and Applied Materials (AMAT) were big losers in the MarketSmith Growth 250.
Triple-Witching
Triple-witching is when stock options, stock index futures, and stock index contracts expire on the same day. Increased market volume and volatility is often seen on such days.
Small-Cap Russell 2000 and Innovator IBD 50 ETF
The small-cap Russell 2000 also lagged, falling 1%, while the Innovator IBD 50 ETF (FFTY) saw a 1.3% decline at closing bell.
Crude Oil and Treasury Yield
Crude oil rose 0.5% to trade at $90.62 a barrel. The yield on the benchmark 10-year Treasury note surged 3 basis points to 4.32% ahead of the Fed meeting.
Dow Jones Stocks
Disney (DIS) pared some gains in the afternoon after news of a $10 billion offer for its ABC network along with the FX and National Geographic channels. Health care stock Merck (MRK) gave up gains after a promising start, while UnitedHealth (UNH) held some gains.
Stocks Moving Today
Arm (ARM) rose in morning trade after its successful first day of trading Thursday. But shares reversed sharply in the afternoon Friday and were down more than 4% at the closing bell. Instacart raised the price target for its proposed IPO to $28 to $30 a share. Neumora Therapeutics (NMRA) had a dull day in the first day of trading, debuting at $16.50 a share and falling slightly lower at the close. Adobe (ADBE) plunged to its 50-day line after results.
Lennar and Homebuilders
Lennar (LEN) fell after it reported third-quarter earnings. Margins came under pressure in a rising interest rate environment. Warren Buffett-backed homebuilder pared some losses but remained over 2% lower on Friday. Lennar is one of three recent homebuilder picks by Warren Buffett’s Berkshire Hathaway (BRKB).
Used-Car Auctioneer Copart
Used-car auctioneer Copart (CPRT) also pared some losses but remained below the 50-day line after fourth-quarter results.
Automakers and UAW Deal
Three leading automakers faced fire as the deadline for striking a deal with the UAW passed. However, Ford (F) pared some early losses and was flat at market close, while General Motors (GM) and Stellantis (STLA) rose as well in the stock market today.
New York Fed’s Monthly Survey and Consumer Sentiment
The New York Fed’s monthly survey of New York manufacturers beat consensus expectations. Consumer sentiment for September, measured by the University of Michigan’s Consumer Survey Center, fell however.
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