Major indexes closed near session lows on Witch Friday ahead of next week’s Federal Reserve meeting. The Dow Jones Industrial Average failed to reclaim its 50-day moving average and fell nearly 300 points, closing down 0.8% as of 4 p.m. ET.
The S&P 500 Index and Nasdaq Composite suffered a harsher fate and fell 1.2% and 1.6% respectively on Friday. Both indexes closed near session lows and below their 50-day moving average.
The Federal Reserve will hold a two-day meeting next week to make a rate decision. According to the CME’s FedWatchTool, the probability that rates will remain unchanged is 97%. The current target rate is 5.25%-5.5%.
Subsequently, technology stocks dragged the Nasdaq lower Taiwan semiconductors (TSM) called for a delay in deliveries of chip equipment. Supermicrocomputer (SMCI), Axcelis Technologies (ACLS), KLA (KLAC) e Applied materials (AMAT) were big losers in the MarketSmith Growth 250.
Volume was higher on the NYSE and Nasdaq, compared to the same time Thursday. The triple spell occurs when stock options, stock index futures, and stock index contracts expire on the same day. An increase in market volume and volatility is often observed these days.
The small-cap Russell 2000 also lagged, losing 1%, while the Innovator IBD 50 ETF (FFTY) was down 1.3% at the close.
Crude oil rose 0.5% to trade at $90.62 a barrel.
The yield on the benchmark 10-year Treasury note rose 3 basis points to 4.32% ahead of the Fed meeting.
Dow Jones stocks
Disney (DIS) pared some gains in the afternoon after news of a $10 billion bid for its ABC network along with channels FX and National Geographic. The company has been in talks to sell some of its TV assets since July as streaming services rise. Disney stock faces resistance at the 50-day line.
The health title Merck (MRK) gave up gains after a promising start, while UnitedHealth (UNH) posted some gains. MRK failed to retake the 50-day line on Friday, while UNH remained below it.
Stocks move today
Arm (ARM) rose in morning trading after a successful first day of trading on Thursday. But shares made a sharp turnaround on Friday afternoon, falling more than 4% at the close. Shares had closed at 63.59 on Thursday, 25% higher than the IPO price of 51.
Meanwhile, food delivery company Instacart raised the price target for its proposed IPO from $28 to $30 per share, from $26 to $28.
Another IPO, backed by Softbank Neurotherapy (NMRA) had a dull day on its first day of trading, debuting at 16.50 per share and falling slightly lower at the close, below its offering price of $17.
Adobe (ADBE) fell to the 50-day line after the results. The software company expects revenue of $5 billion with earnings per share of $4.15 at the high end for the fourth quarter.
Out of the Dow Jones, Lennar (LEN) fell after reporting third-quarter earnings on Thursday. Margins came under pressure in a rising interest rate environment and fell to 24.4% after 29.2% in the same quarter a year earlier. The Warren Buffett-backed homebuilder pared some losses after undercutting its base in large volumes, but remained down more than 2% on Friday.
Lennar is one of Warren Buffett’s three recent homebuilder picks Berkshire Hathaway (BRKB), the other two are DR Horton (DHI) e NVR (NVR).
Only NVR has an IBD EPS Rating above 80. And all three have declining relative strength lines with stock prices below their 10-week moving averages, which are bearish signals.
Used car auctioneer Copart (CPRT) also pared some losses, but remained below the 50-day mark following its fourth-quarter results.
Three major automakers faced fire when the deadline to strike a deal with the UAW passed. However, Ford (F) pared some early losses and remained flat at market close, while General Motors (GM) e Stellantis (STLA) also rose on the stock market today. STLA has recovered from its 50-day line.
According to Econoday, the Fed’s monthly survey of New York manufacturers beat consensus expectations of -10 with a reading of 1.9 for September. Consumer sentiment for September, as measured by the University of Michigan’s Consumer Survey Center, fell to 67.7 from 69.5 in August, however.
Please Follow VRamakrishnan to X/Twitter for more stock market news today.
YOU MIGHT ALSO LIKE:
What to do when stocks show bearish action; Tesla strong, Fed meeting looming
The best growth stocks to buy and watch
Learn how to time the market with IBD’s ETF market strategy
Find the best long-term investments with IBD’s long-term leaders
MarketSmith: Research, charts, data and coaching all in one place