S&P 500 struggles for direction amid tough Fed speak, retail earnings

By Yasin Ebrahim

Investing.com -- The S&P 500 inched higher after struggling for direction Friday as investors weighed up further hawkish remarks from Federal Reserve officials, and the latest wave of quarterly earnings.

The S&P 500 rose 0.37%, the Dow Jones Industrial Average gained 0.48%, or 162 points, the Nasdaq  fell 0.1%.

Boston Federal Reserve President Susan Collins said “all possible increments” of rate hikes were on the table for the Fed’s December meeting including a 75-basis point rate hike. The comments echoed similar remarks from Fed members, who this week have insisted that further monetary policy tightening is needed to quell inflation.

Treasury yields have continued to strengthen against the backdrop of hawkish remarks from Fed members, pressuring growth sectors of the market like tech and consumer discretionary.

Big tech traded mixed, with Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) leading the decline, while Apple (NASDAQ:AAPL) and Meta Platforms Inc (NASDAQ:META) traded slightly higher.

Amazon.com (NASDAQ:AMZN), meanwhile, fell 1% as the e-commerce giant confirmed jobs cuts would continue into next year amid a “challenging” economy.

Chip stocks remained in the red as Applied Materials (NASDAQ:AMAT) gave up some gains despite reporting third-quarter results that topped analysts' estimates.  

Energy was also a big drag on the broader market as oil prices fell amid ongoing fears about weaker demand in China amid ongoing Covid-19 restrictions.  

The fall in oil prices is “due to concerns about demand amid rising Covid cases in China, which make it unlikely that coronavirus restrictions will be relaxed anytime soon,” Commerzbank said in a note.

The flurry of earnings from retailers, meanwhile, continued to show mixed performance.

Foot Locker (NYSE:FL) raised its full-year guidance after reporting better-than-expected third-quarter results, sending its shares more than 8% higher.

The apparel and footwear retailer also said it expects a “less challenging environment in Q4 than previously expected…with comps planned down "only" 6-8% verses messaging from management previously that comps would be [down] double digits,” Wedbush said after lifting its price target on the stock to $37 from $30.

Gap (NYSE:GPS) swung to an unexpected profit in the third quarter, driven by “stronger sales momentum as a result of a sequential improvement in comps across brands,” Goldman Sachs said in a note.

Williams-Sonoma (NYSE:WSM), meanwhile, reported quarterly results that topped estimates on the top line, but pulled its guidance through fiscal 2024, citing macroeconomic uncertainty. Its shares fell 7%.

In other news, Carvana (NYSE:CVNA) slumped 6% as the used-car retailer is set to cut 1,500 jobs, or 8% of its workforce, CNBC reported, citing an internal memo.