By Christine Idzelis and William Watts
U.S. stocks closed mixed Friday, with the S&P 500 index eking out a gain after trading in bear-market territory earlier in the session, but all three major benchmarks booked another week of losses. The Dow Jones Industrial Average suffered an eighth straight weekly decline, marking its longest losing streak since April 1932, according to Dow Jones Market Data.
How did stocks trade?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.05% edged up 8.77 points, or less than 0.1%, to close at 31,261.90.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +1.06% added less than 1 point to finish nearly flat at 3,901.36, after earlier trading in bear market territory.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.90% fell 33.88 points, or 0.3%, to end at 11,354.62, its lowest closing value since November 3, 2020.
On Thursday , the Dow industrials and S&P 500 booked their lowest closes since March 2021, according to Dow Jones Market Data.
For the week, the Dow fell 2.9%, the S&P 500 dropped 3.1% and the Nasdaq slid 3.8%, according to Dow Jones Market Data.
What drove markets?
Friday morning’s bounce was short-lived, with all three major stock benchmarks showing sharp losses in afternoon trading before ending mixed at the closing bell.
The early rally provided an opportunity for traders to “lighten up on exposure” ahead of the weekend, selling amid “growing uncertainty and anxiety” about the direction of the economy as the Federal Reserve raises interest rates to fight high inflation, according to Wayne Wicker, chief investment officer at MissionSquare Retirement.
“Investor psychology is driving a lot of this,” Wicker said in a phone interview Friday, referring to the selloff.
The S&P 500 slipped into bear-market territory Friday afternoon, but skirted finishing there. A bear market is defined by a fall of at least 20% from a recent peak.
“Stocks remain on a shaky footing. Investors’ list of worries grows ever larger,” said Fawad Razaqzada, market analyst with City Index and Forex.com, in a note.
“Inflation. Interest-rate hikes. Low economic growth. Stagflation. Recession. Perhaps most importantly for stocks, the Fed is not there to provide cushion, like before,” he wrote.
Stocks were initially buoyed after the People’s Bank of China on Friday cut in its rate on five-year loans , aimed at shoring up weak housing sales by reducing mortgage costs. The country has been battling COVID outbreaks, with lockdowns in industrial hubs such as Shanghai blamed for weak factory and consumer activity data in April.
But analysts said the move also underlined concerns.
“Where the rest of the world is thinking of raising rates because of inflation, they’re cutting rates in order to help the economy,” said JJ Kinahan, chief market strategist for online brokerage firm tastytrade Inc., in a phone interview Friday. “I think that’s a little bit of a warning sign,” as U.S. companies that benefit from demand in China may be hurt by a slowing Chinese economy as well as supply-chain disruptions linked to the country’s lockdowns, he said.
Consumer discretionary was the worst performing sector in the S&P 500 index Friday, falling 1.5%, according to FactSet data.