S&P 500 closes higher on Friday, but ends week with losses

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Afternoon trading Friday saw the major averages rise to close the day on a positive note. Investors weighed the Federal Reserve’s tougher language and scanned the most recent earnings reports.

The Dow Jones Industrial Average rose 199.37 points, or 0.59%, to 33,745.69, while the S&P 500 climbed 0.48% to 3,965.34. The Nasdaq Composite came in just 0.01% below the flat line of 11146.06.

All the major averages experienced losses this week. The Dow finished 0.01% lower. The S&P 500 lost 0.69% for the week, while the Nasdaq ended 1.57% lower. However, all three indexes remain positive for the month.

The market was divided for much of the day, with the S&P 500 trading mostly flat as investors started to reset expectations after a couple of rallies over the past week, beginning with the October CPI print. Stephanie Lang, chief investment officer of Homrich Berg said that this week was marked by a “back to reality” viewpoint.

She said, “Following a big rally following the better-than expected CPI print,” and that the market is now digesting current data. This is bringing things back into reality. “The rally that followed the CPI print we don’t feel was justified by fundamentals… The market’s also pricing in a soft landing here, which we don’t think is likely to occur. When Fed officials are heard reiterating their stance you can start to see the market adjust to that.

On Friday, Boston Federal Reserve President Susan Collins expressed confidence that policymakers can tame inflation without doing too much damage to employment.

James Bullard, president of St. Louis Federal Reserve said Thursday that the policy rate was not yet in a “zone that may be considered sufficiently restrictive.” He suggested that the appropriate range for federal funds rates could be between 5% and 7%, which is higher then what the market is pricing.

“We continue to think investors should place much more emphasis on the actual data and not focus too much on Fed rhetoric (the former will show where inflation is headed while the latter is fixated on where it was),”  said Adam Crisafulli, founder of Vital Knowledge. “Despite this, investors have grown tired of fighting the Fed’s tape bombs every day and it could take 2-3 more CPIs before officials stop warning the market whenever it attempts to rally.

Lea la cobertura del mercado de hoy en español aquí.

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