U.S. stocks ended lower Friday, surrendering early gains after a report from the University of Michigan showed consumer sentiment soured in May, helping to revive recession fears. The Dow Jones Industrial Average and S&P 500 each booked back-to-back weekly losses. <\/p>\n
For the week, the Dow slid 1.1%, the S&P 500 slipped 0.3% and the Nasdaq edged up 0.4%, according to FactSet data. The technology-heavy Nasdaq notched a third straight week of gains.<\/p>\n
U.S. stocks finished down Friday after a gauge of consumer sentiment fell, with all three major benchmarks giving up modest gains seen after the opening bell.<\/p>\n
The University of Michigan\u2019s index of consumer sentiment dropped to 57.7 in May based on a preliminary reading, from 63.5 in April. That\u2019s the lowest level since November and below an expected May reading of 63 by economists polled by The Wall Street Journal.<\/p>\n
The numbers in the University of Michigan\u2019s survey \u201cstink,\u201d said Steve Sosnick, chief strategist at Interactive Brokers, in a phone interview Friday. The findings are \u201cnot market-friendly.\u201d <\/p>\n
Consumers\u2019 inflation expectations over the next five years rose to 3.2%, from 3% in April. That\u2019s the highest reading since 2011.<\/p>\n
Inflation is \u201cnot coming down fast enough for people\u2019s taste,\u201d said Sosnick. Also, \u201ceconomic and political rhetoric has been so dreary that it can\u2019t help sentiment,\u201d he said pointing to concerns over the U.S. debt ceiling and worries about a slowing economy.<\/p>\n
The S&P 500\u2019s 11 sectors closed mixed Friday, with consumer discretionary seeing the worst performance in booking a 0.9% decline, according to FactSet data. The utilities sector had the best performance Friday, rising a modest 0.4%. <\/p>\n
See: <\/strong>Consumer sentiment sours in May on renewed worries about the U.S. economy, debt ceiling<\/p>\n \u201cIt was those Michigan numbers that set us up on the downside,\u201d said Joe Saluzzi, co-head of equity trading at Themis Trading, during a phone interview with MarketWatch. <\/p>\n \u201cIn this case, bad news was bad news,\u201d Saluzzi said, a reference to the fact that U.S. stocks sometimes rally on downbeat economic data because it signals that the Federal Reserve\u2019s interest-rate hikes are having their intended effect. <\/p>\n \u201cNow, you\u2019re getting numbers that investors aren\u2019t happy with,\u201d he added. <\/p>\n Two of the three major U.S. stock benchmarks booked weekly declines Friday. The Dow Jones Industrial Average fell 1.1% for the week, while the S&P 500 shed 0.3% and the Nasdaq Composite saw a weekly 0.4% gain, according to FactSet data.<\/p>\n Stocks have been weighed down by economic worries and the recent \u201cbanking stress is tied in with that,\u201d according to Kevin Gordon, senior investment strategist at Charles Schwab.<\/p>\n While the S&P 500 and the technology-heavy Nasdaq Composite are up so far this year, their gains have been driven by megacap companies, Gordon said in a phone interview Friday. \u201cIf you take away the biggest names\u201d in those indexes, he said, the \u201cperformance is pretty weak.\u201d<\/p>\n Read:<\/strong> The S&P 500 is top-heavy with tech. Here\u2019s what that says about future stock-market returns.<\/p>\n Regional banks had struggled Thursday, with PacWest Bancorp Investors have digested a raft of disappointing economic data in recent weeks, including Thursday\u2019s weekly jobless claims report, which showed applications for unemployment benefits in the U.S. rose to their highest level since October 2021. <\/p>\n Meanwhile, the uncertain outlook for Congress to raise the debt ceiling was weighing on investors\u2019 minds, analysts said, as a meeting between President Joe Biden and top Congressional leaders was delayed until next week amid signs that staff negotiations were progressing.<\/p>\n See<\/strong>:\u00a0Debt-ceiling meetings \u2018productive\u2019 as Biden, leaders set to reconvene next week: White House<\/p>\n Also read:<\/strong> Here\u2019s where investors may turn to \u2018hide\u2019 as U.S. debt-ceiling deadline looms based on 2011 market reaction<\/p>\n Beyond that, the outlook for Federal Reserve monetary policy also seems unclear.<\/p>\n Fed Gov. Michelle Bowman signaled early Friday that she was not on-board with the view that April inflation data from the consumer-price index showed enough progress on reducing price pressures to justify the central bank keeping interest rates steady for the rest of the year. <\/p>\n \u201cIn my view, the most recent CPI and employment reports have not provided consistent evidence that inflation is on a downward path, and I will continue to closely monitor the incoming data as I consider the appropriate stance of monetary policy going into our June meeting,\u201d Bowman said in a speech at a European Central Bank conference in Frankfurt.<\/p>\n \u201cThere\u2019s so much uncertainty out there with these markets,\u201d said Mark Arbeter, president of Arbeter Investments, during a phone interview. <\/p>\n Despite the latest move lower, U.S. stocks remained mired in a tight range that has held for most of the year. It would take a break above 4,200 on the S&P 500 index to signal that a sustainable bull market might be in the offing, Arbeter said.<\/p>\n
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\n reporting a big drop in deposits for the week ending May 5. The SPDR S&P Regional Banking ETF
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\n ended Friday with a 0.6% gain, after dropping 2.5% on Thursday, according to FactSet data. <\/p>\nCompanies in focus<\/h2>\n