© Reuters. FILE PHOTO: Traders work at the New York Stock Exchange (NYSE) in New York City, US, April 14, 2023. REUTERS/Brendan McDiarmid
Written by Chuck Mikolajczak
NEW YORK (Reuters) – U.S. stocks ended the trading week on soft notes on Friday as early gains faded after U.S. debt ceiling negotiations stalled in Washington, dampening optimism that a deal could be reached in the coming days to avert a default.
Stocks have risen over the past two sessions amid growing confidence that a deal to raise the $31.4 trillion debt limit could be reached in the coming days, with the benchmark index up more than 2%. But an initial advance on Friday was reversed by reports that talks stalled while Federal Reserve Chairman Jerome Powell was speaking at the Monetary Policy Committee.
“It looks like the market is going into this weekend thinking that the talks were going to move toward a framework for an agreement…but what you’re seeing now is Republicans are saying, no, this is not acceptable, and they’re just getting started,” said Quincy Crosby, chief global strategist at LPL Financial (LPL Financial). NASDAQ 🙂 in Charlotte, North Carolina, “It’s a Pullback.”
“It could be to put more pressure on the Democratic caucus and also take advantage of the fact that Biden is on the outside. But this Friday afternoon headline is definitely not a positive.”
The index fell 109.28 points, or 0.33%, to 33,426.63, and the S&P 500 lost 6.07 points, or 0.14%, to 4,191.98 points, and fell 30.94 points, or 0.24%, to 12,657.90.
For the week, the Dow was up 0.38%, the S&P 500 jumped 1.65% and the Nasdaq advanced 3.04%. The S&P 500 and Nasdaq posted their biggest weekly percentage gains since the last week of March.
The interest rate outlook remained uncertain. Powell said it remains unclear whether additional interest rate increases are needed as the central bank weighs the impact of previous increases as evidenced by recent problems in the banking sector.
Sentiment was also dampened by a CNN report that US Treasury Secretary Janet Yellen told bank chief executives on Thursday that more bank mergers may be necessary after a series of bank failures.
Regional banking stocks, which were the first in the industry to feel the impact of the Fed’s tightening policy, fell, with the KBW Regional Banking Index down about 2.17% during the session. However, the index rose 6.2% for the week snapping a three-week streak of declines as investors saw the problems in the sector largely contained for the time being.
shares Morgan Stanley (NYSE::) lost 2.66% after CEO James Gorman announced he would be stepping down from his position in the next 12 months.
foot locker (NYSE: Inc) tumbled and suffered its largest daily percentage drop since February 25, 2022 after the shoe retailer cut its annual sales and profit forecasts.
The warning also affected the daw component Nike Inc (NYSE: ), down 3.46%, and under shield Inc (NYSE: ), which closed down 4.20%.
The Foot Locker update concludes a week of caution for other retailers this week, including Goal Corp (NYSE:) Home Depot Inc (NYSE:) and TJX Companies Inc (NYSE: ), as consumers adjust to high inflation and higher interest rates.
Trading volume on US exchanges reached 9.86 billion shares, compared to an average of 10.62 billion for the full session over the last 20 trading days.
Declining issues outnumbered advancers on the NYSE by a ratio of 1.36 to 1; On the Nasdaq, the ratio was 1.19 to 1 in favor of declining stocks.
The S&P 500 posted 28 new 52-week highs and three new lows; The Nasdaq index posted 79 new highs and 87 new lows.