The stock market closed lower Friday after FedEx issued a warning about its earnings and the economy. The tech-heavy Nasdaq composite led the downside. FedEx's 21% decline and energy stocks led the drop among major stocks.
The Nasdaq composite closed 0.9% lower. The Dow Jones Industrial Average closed down 0.75 while the S&P 500 fell 0.7%.
The small-cap Russell 2000 index was down 1.5%.
Volume rose on the Nasdaq and the NYSE vs. the same time on Thursday, early data showed.
The major indexes continued to fall further below support at their 50-day moving averages, while the S&P 500 and Nasdaq undercut their recent Sept. 6 lows, another important level of support.
On the week, the S&P 500 closed down 4.8%, the Nasdaq dropped 5.5% and the Dow closed down 4.1%
Stock Market On Track For Weekly Loss
The U.S. 10-year Treasury note yield seesawed during the day before closing up at 3.46%, just off the 11-year high 3.48% set on June 14.
FedEx plummeted more than 21% after the company issued warnings for its fiscal first quarter and withdrew its full-year guidance. The shipping giant announced cost-cutting measures, including the closing of 90 office locations.
"Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.," CEO Raj Subramaniam said in a news release. "While this performance is disappointing, we are aggressively accelerating cost reduction efforts."
Shares of the shipping company continued to weaken below support at its 50-day and 200-day moving averages.
Economy Braces For Expected Rate Cut Next Week
Also on Friday, the University of Michigan sentiment index showed inflation expectations for the next 12 months were the lowest since July 2021.
"As the market braces for next week's Federal Open Market Committee (FOMC) meeting, today's market — a triple witching Friday that is sure to increase the market's volume and volatility — is being buffeted by a profit warning from FedEx's CEO underscored by his expectations for an impending worldwide recession," said Quincy Krosby, Chief Global Strategist for LPL Financial. "The canary in the coal mine may not yet be dead, but is probably struggling to breathe."
Markets have begun to write off a 75-basis point hike as an inflation-fighting measure when the Federal Reserve meets next week. Investors now see a 83% chance of a 75-basis-point hike vs. a 17% likelihood the Fed will boost rates by a full percentage point.
The Innovator IBD 50 ETF, which found resistance at its 50-day moving average this week, underperformed the stock market again on Friday with a 2.8% loss.
A handful of fertilizer, oil and gas names continued to lead the downside on Friday, including natural gas play Flex LNG, New Fortress Energy, Comstock Resources and CF Industries.
Energy Stocks Take It On The Chin
Among the 11 S&P 500 sectors, energy was among the worst performers. The Energy Select Sector SPDR lost 2%. Industrial stocks also led the downside.
U.S. crude oil prices rose 0.2%, trading at around $85.30 per barrel.
On the upside, Bowlero hit a fresh high and broke out above a buy point even as the broad market continued to stumble.
Shares are trading inside the buy zone from a 13.19 entry after a strong-volume rise. The relative strength line has spiked sharply over the past week and hit a new high. Bowlero climbed over 10% the past week to all-time highs, according to MarketSmith chart analysis.
BJ's Wholesale Club was one of the few stocks in the IBD 50 that traded higher, rising 2.6%. Shares remain extended from a recent breakout above a 71.10 double-bottom buy point. The stock has recently been floating higher above its 21-day exponential moving average.
Ulta Beauty also traded inside a 5% buy zone, but remains near the lower edge. The stock has been trending sideways after breaking out from a 417.08 double-bottom base entry. Ulta briefly became extended last week but shares have since receded amid this week's market sell-off.
Follow Michael Molinski on Twitter @IMmolinski
