Closing Market Summary: S&P Closes Friday Flat, Securing 7.2% Gain for Q3Wall Street finished Friday little changed, securing big gains for the third quarter. The S&P 500 kept near its flat line throughout the session, closing just a tick below its unchanged mark. The Nasdaq and the Dow added 0.1% apiece. For the quarter, the S&P 500 added 7.2%, the Dow added 9.0%, and the Nasdaq added 7.1%.
Friday began with news from across the pond, where Italy's anti-establishment government widened the country's budget-deficit target for next year to 2.4% of GDP. That could raise problems with the EU, which has pushed Italy to lower its public debt. European stocks fell in reaction, with Italy's MIB (-3.7%) leading the retreat.
The headlines weighed on the U.S. futures market as well, but Wall Street quickly pared losses after the opening bell.
Financial shares fell once again on Friday (-1.1%), extending the heavily-weighted financial sector's weekly loss to 4.1%. On the flip side, the lightly-weighted real estate (+1.3%) and utilities (+1.5%) sectors rallied, closing atop the sector standings. Most other groups finished within 0.4% of their unchanged marks.
Tesla (TSLA 264.77, -42.75) tumbled 13.9% after its CEO, Elon Musk, was sued by the SEC over his tweet about taking the electric automaker private. Mr. Musk and the SEC were reportedly close to reaching a no-guilt settlement that would have barred him from being chairman for two years, but Mr. Musk backed out at the last minute.
In other corporate news, Facebook (FB 164.46, -4.38) dropped 2.6% after announcing that it's discovered a "very serious" security issue that could affect around 50 million accounts; NVIDIA (NVDA 281.02, +13.62) climbed 5.1% after Evercore ISI raised its target price to a new Street high of $400 per share; and Intel (INTC 47.29, +1.41) advanced 3.1% after announcing that it's making progress with 10nm chips, but Intel competitor Advanced Micro (AMD 30.89, -1.70) lost 5.2%.
On Capitol Hill, the Senate Judiciary Committee advanced President Trump's Supreme Court nomination of Brett Kavanaugh on Friday, but a final Senate vote will be delayed after Senator Jeff Flake (R-AZ) unexpectedly called for a one-week FBI investigation into sexual misconduct allegations against the judge.
Reviewing Friday's batch of economic data, which included August Personal Income, Personal Spending, and PCE Prices, the final reading of the University of Michigan Consumer Sentiment Index for September, and the Chicago PMI Index for September:
- Personal income climbed 0.3% in August ( consensus +0.4%) following an unrevised increase of 0.3% in July. Meanwhile, personal spending rose 0.3% in August (consensus +0.3%) following an unrevised increase of 0.4% in July. The PCE Price Index rose 0.1% in August (consensus +0.1%), and the core PCE Price Index, which excludes food and energy, was flat (consensus +0.1%). Year-over-year, the core PCE Price Index is up 2.0%, unchanged from July.
- The key takeaway from the report is that the year-over-year increase in the PCE Price Index (+2.2% vs. +2.3% prior) and the core PCE Price Index (+2.0% vs. +2.0% prior) will keep the Federal Reserve on its tightening path.
- The final reading of the University of Michigan Consumer Sentiment Index for September ticked down to 100.1 (consensus 100.5) from 100.8 in the preliminary reading.
- The key takeaway from the report is that even with the pullback, the Sentiment Index remains above 100.0 for the third time since the start of 2004.
- The Chicago PMI Index declined to 60.4 in September from 63.6 in August. The dividing line between expansion and contraction is 50.0.
- The key takeaway from the report is that the September dip represents the second consecutive decline, returning the Index into the lower half of the range from the past 12 months.
Looking ahead, investors will receive the ISM Manufacturing Index for September and the August Construction Spending report on Monday.
- Nasdaq Composite +16.6% YTD
- Russell 2000 +10.5% YTD
- S&P 500 +9.0% YTD
- Dow Jones Industrial Average +7.0% YTD