S&P, Nasdaq, Dow see choppy trading amid muted sentiment, weaker housing data

S&P, Nasdaq, Dow see choppy trading amid muted sentiment, weaker housing data

S&P, Nasdaq, Dow see choppy trading amid muted sentiment, weaker housing data

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Wall Street’s major indices trimmed gains further on Friday amid muted investor sentiment and weaker home sales data. While the three indices opened higher, the Nasdaq Composite (COMP.IND) reversed course later on.

The S&P 500 (SP500) rose 0.08% after trading in the red for a while and the Dow (DJI) edged 0.26% higher. But the tech-heavy Nasdaq Composite (COMP.IND) dropped 0.39%.

The indices were on track to post weekly losses as hawkish comments from Federal Reserve speakers dented sentiment. This followed a notable rally last week as cooler-than-expected inflation data prompted buying.

St. Louis Fed President James Bullard on Thursday said more hikes were needed – more than the market is pricing in – to get to restrictive levels.

“Bullard unleashed a flurry of hawkish views, which didn’t get a warm reception in the markets initially. But they did rebound so it seems investors are still taking them with a pinch of salt,” said Craig Erlam, senior market analyst, OANDA.

“The Fed is clearly concerned that ‘dovish pivot’ speculation could be undermining its tightening efforts, which could explain why it’s being so steadfast in its hawkish message,” he added.

The 10-year Treasury yield (US10Y) rose 5 bps to 3.82%, while the 2-year yield (US2Y) was up 4 bps at 4.49%.

On the economic data front, Oct. existing home sales fell more than expected amid higher mortgage rates. Leading indicators in Oct. also dropped more than expected, suggesting the economy is possibly in a recession.

“Mortgage rates pointed to another leg down in housing demand and limited inventories are preventing prices from slowing more quickly. This imbalance can’t persist indefinitely, but it will probably still take a while for the market to bottom out,” said Jefferies analyst Thomas Simons.

Of the 11 S&P 500 sectors, seven were trading in the green, led by utilities and healthcare stocks. Energy stocks led losses after WTI crude oil slid below $80 for the first time since Sept.

Among active stocks, Farfetch stock slumped after cutting forecasts, while Ross Stores soared after it reported a big earnings beat and bullish guidance.

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