Major stock market indexes cut losses into the noon hour Friday and are off the lows of the day. Higher January inflation numbers and strong consumer spending added to investor worries about more rate hikes and a potential recession.
The Dow Jones Industrial Average fell 1% and the S&P 500 dropped 1.2%. The Nasdaq shed 1.7%, while the small-cap Russell 2000 lost 1%.
Volume fell on the NYSE and the Nasdaq compared to the same time on Thursday.
The S&P 500 joined the Dow Jones below the 50-day moving average while the Nasdaq pierced its 200-day moving average. The tech-heavy Nasdaq 100-tracking Invesco QQQ Trust ETF sold off more than 2%.
Crude oil regained 1.2% to $76.34 per barrel. The Energy Select Sector SPDR ETF gave back 0.4%, finding support at the 200-day line.
Bitcoin futures edged 3.5% lower to $23,315. The Innovator IBD 50 ETF (FFTY) sank 1%. The 10-year U.S. Treasury yield added 8 basis points to 3.96%.
European markets were down, with the German DAX dropping 1.7% and the Paris CAC 1.8%. The London FTSE edged 0.4% lower to close out the trading day.
The Fed Will Hate These Inflation Numbers
The Federal Reserve looks to the personal consumption expenditures (PCE) price index as a measure of inflation and a factor in policy decision-making, including the pace and level of rate hikes.
The January PCE index rose 0.6% vs. expectations for a 0.4% increase. The core PCE index, which excludes food and energy, also rose 0.6% vs. the 0.4% forecast.
The year-over-year PCE inflation rate rose to 5.4% vs. the 4.9% consensus, lifting from December's 5.3%. Core PCE inflation rose to 4.7% vs. 4.3%, and slightly above December's revised 4.6%.
In other economic news, January personal spending rose 1.8% vs. the 1.2% expected, rising from December's revised -0.1%, showing continued consumer strength. Personal income rose 0.6% vs. 1.0% outlook, after 0.3% in December.
Stock Market Movers: Taylor Swift Fiasco Sinks Live Nation
Live Nation Entertainment reported a Q4 operating loss in strong revenue but failed to post EPS, sending the stock into a tailspin. The incomplete data suggests the Taylor Swift ticketing fiasco has taken a toll on profitability. LYV shares plummeted 9% midday Friday.
Shares crushed the 50-day line, triggering a sell signal. The drop puts the Taylor Swift stock on track for its largest percent decrease since March 2022, when it fell 12.3%. It's the S&P 500 's second biggest loser today.
Intuit popped 4% following better-than-expected top and bottom lines in the January-ended quarter. The TurboTax creator posted earnings of $2.22 per share, up from $1.66 and $1.10 in the two prior quarters. Analysts expect 15% annualized EPS growth in 2023 and 13% in 2024. The stock is an S&P 500 leader today.
Block deteriorated from early morning gains, up 3.7% after missing Q4 earnings estimates but beating on revenue and gross profit. The company developed the Cash App mobile payment system.
MercadoLibre rose 1% after better-than-expected Q4 EPS and sales. Shares retreated into the 5% buy zone of a choppy base, reaching 1,150. The buy point sits at 1,095.44, with an alternate 1,250.58 entry.
The IBD 50 Latin American e-commerce stock is ranked first out of 58 stocks in the internet retail group. The group is a high-ranking 23rd out of the 197 IBD industry groups.
Adobe Drops On Potential Deal Block
Digital media stock Adobe lost 7.2% in Friday's stock market on news the Department of Justice (DOJ) is looking to block its $20 billion merger with web-design firm Figma.
Autodesk gapped down over 10% in heavy volume, after lowering Q1 EPS guidance and full-year 2024 billings, It beat Q4 EPS estimates. The design, engineering and entertainment software stock dropped below its 50-day line, triggering a sell signal, and is the S&P 500's biggest loser.
Dow component Boeing fell 4.5% on news the aerospace and defense giant will temporarily stop 787 Dreamliner deliveries, as it does additional testing on the fuselage.
BA shares dipped below the 21-day exponential moving average Tuesday and are finding support at the 50-day line. BA is the Dow's biggest loser.
IBD 50 stock Floor & Decor gained 0.7% after reporting better-than-expected Q4 EPS and revenue numbers. The stock is in the 5% buy zone of a cup-with-handle base with an 88.82 buy point.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
