The stock market closed with mixed results Friday as the major indexes treaded water in the final hour of trading. The Dow Jones Industrial Average gave back gains and closed slightly negative, weighed down by Nike.
Indexes saw a fast decline starting around 2 p.m. ET, but bounced back somewhat. The Dow closed down less than 0.1%. The Nasdaq trimmed gains to 0.2%, while the S&P 500 also closed 0.2% higher on the stock market today. The small-cap Russell 2000 led the day, climbing 0.8%.
The Nasdaq posted a 1.2% gain for the week while the S&P 500 rose 0.8%. And the Dow squeezed out a 0.2% weekly surplus.
Weighing on the Dow Friday was Nike, which gapped down 11.8% following the footwear and apparel company's mixed fiscal second-quarter earnings report late Thursday. Earnings topped views while sales lagged, and the company lowered its full-year revenue outlook. Nike undercut its 50-day moving average as the market deteriorated in afternoon trading. Nike was the biggest loser on the Dow and S&P 500 Friday.
The Invesco QQQ Trust, which tracks the Nasdaq 100, edged up 0.2%. The Innovator IBD 50 ETF dipped 0.1%.
Volume fell on the New York Stock Exchange and the Nasdaq vs. the same time on Thursday, as investors prepared for the long holiday weekend.
Little Impact From Inflation Report
The Commerce Department released its November personal income and spending report Friday morning, with the year-over-year personal consumption expenditures price index rising 2.6% compared with estimates for 2.9%. This was in line with the revised 2.9% October reading. Core PCE rose 3.2%, below the 3.4% estimate.
November personal income rose 0.4% as expected and was slightly higher than the revised 0.3% increase in October. Personal consumption expenditures increased 0.2% vs. the 0.3% rise expected, but topped the revised 0.1% increase in October.
The PCE is the Federal Reserve's preferred inflation gauge, and it's getting closer to the Fed's 2% target. In fact, over the past six months, core inflation is running at an annualized rate of 1.9%, the report says, boosting the chances of interest rate cuts in 2024.
But along with stocks, the bond market had a muted response Friday. The 10-year Treasury yield held at around 3.9%.
Stock Market Movers: Biotech Stock Soars On Deal News
AAR plunged 10.2% after the aviation parts and services provider reported a beat on its fiscal second-quarter adjusted earnings estimates but a miss on sales.
Karuna Therapeutics soared 47.7% on news that Bristol Myers Squibb wants to buy the biotech company for around $14 billion. Karuna specializes in treatment for neuropsychiatric and neurodegenerative diseases. BMY gained 2% on the news.
Biotech stocks surged in sympathy on the Karuna acquisition news.
IBD 50 stock Intra-Cellular Therapies gapped up 5.5%, and is extended from a 63.93 handle buy point. Neurocrine Biosciences also gapped up 6% in heavy trading, and is extended from a 119.29 buy point of a cup-with-handle base.
China Stocks Plummet On Regulation News
Chinese online gaming stock NetEase plummeted 16.1% on news that China's National Press and Publication Administration proposed new regulations to limit time and money spent on online gaming. NTES was already below its 50-day line before Friday's gap downward sent it deep below its 200-day moving average.
Chinese online gaming competitor Tencent also gapped down 9.8% in heavy volume on the news.
Elsewhere, aerospace and industrial engineering software stock Ansys gapped up 18.1% in heavy volume on news it may be a takeover target, according to Bloomberg. The MarketSmith Growth 250 stock reclaimed its 200-day line and topped a 351.23 buy point out of a consolidation. ANSS posted its largest increase since March 17, 2020, when it rose 13.5%, according to Dow Jones Market Data.
Finally, Altair Engineering gapped up 11.5%, surging through a cup-with-handle base with a 74.60 buy point, after JPMorgan initiated coverage with an overweight rating and 86 price target. Shares hit an all-time high.
Follow Kimberley Koenig for more stock market news on X/Twitter @IBD_KKoenig.
