Stocks finished lower Friday as concerns about inflation caused investors to pull back.
The Dow Jones Industrial Average finished down 0.49% at 38,714.77, while the S&P 500 slipped 0.65% to 5,117.09, and the tech-laden Nasdaq lost 0.96% to 15,973.17.
The S&P 500 is down roughly 0.3% from the start of the week, according to CNBC, while the 30-stock Dow and Nasdaq have shed 0.2% and 0.7%
Adobe finished down nearly 14% on disappointing sales guidance and Zillow (ZG) and other real estate tumbled after the National Association of Realtors reached a legal settlement that paves the way for home buyers and sellers to pay lower commissions.
Updated at 1:15PM EST
Downward trend
Stocks continued their downward trend on Friday and headed for a weekly lost as inflation concerns preyed on investors' minds.
The Dow was off 0.70%, while the S&P 500 slipped 0.85% and the Nasdaq dropped 1.12%.
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 76.5 this month, compared with a final reading of 76.9 in February. Economists polled by Reuters had forecast a preliminary reading of 76.9.
"Consumers perceived few signals that the economy is currently improving or deteriorating," said Surveys of Consumers Director Joanne Hsu in a statement. "Indeed, many are withholding judgment about the trajectory of the economy, particularly in the long term, pending the results of this November's election."
Jeffrey Roach, chief economist for LPL Financial, said that “after a massive improvement in early January when most expected the Fed to dramatically ease rates, consumers trimmed expectations in March for the second consecutive month.”
“Consumer expectations about inflation in the next 12 months were unchanged at 3%, indicating inflation expectations are well-anchored," he said. "Consumers are increasingly interested in buying real estate, which a bit surprising given the interest rate environment."
Roach said that nearly a quarter of consumers feel now is a good time to buy a house, so investors should expect continued sales growth for homebuilders, despite high borrowing costs
Tough Morning
The Dow Jones Industrial Average was down 0.33% at 38,778.84, while the S&P 500 slipped 0.58% to 5,120.55, and the tech-laden Nasdaq lost 0.90% to 15,983.95..
Stocks finished lower in the previous session after the producer-price index came in higher than expected. The Dow slipped 0.35%, the S&P 500 lost 0.29% and the Nasdaq gave up 0.3%.
“The stock market's impressive run so far this year is being driven by the resiliency of the U.S. economy, a strong labor market, an influx of fiscal stimulus, improving productivity and an appealing trajectory of continued disinflation,” said Carol Schleif, chief investment officer with BMO Family Office.
“Spending on artificial intelligence by companies is here to stay and companies in all sectors have been developing AI use cases for years and as companies further figure out AI, productivity gains should accelerate," she added, "which should help to boost margins, and that profitability growth will help to support stock prices instead of the market solely relying on multiple expansion.”
Schleif said that big tech remains an important driver for the major stock indexes and the economy.
"The biggest tech names also have the most substantial cash coffers and ability to invest in data centers, infrastructure and research and development, creating this virtuous cycle of invest, innovate and dominate," she said.
The Fed's policy-making Federal Open Market Committee holds its regular monthly meeting this Tuesday and Wednesday. The Fed is expected to keep rates unchanged at the March 19-20 meeting for the fifth straight time, Bloomberg reported.
In company news, shares of Adobe (ADBE) was down 12% after the graphics-software company beat Wall Street's first-quarter estimates but offered disappointing guidance.
McDonald’s (MCD) said on Friday that a technology outage had disrupted operations at many of its outlets worldwide, including Japan and Australia, but said it wasn't a cybersecurity incident, Reuters reported.
Many McDonald's stores in Japan stopped taking in-person and mobile customer orders because of the system disruption, a spokesperson at McDonald's Holdings Company Japan said, adding that the company was working to restore operations soon.
Tesla (TSLA) shares were up 1.1% after the electric vehicle maker closed down 4.1% on Thursday.
Apple (AAPL) bought artificial intelligence (AI) startup DarwinAI and added dozens of the Canadian company's staffers to its AI division, Bloomberg News reported.
The iPhone maker purchased the business earlier this year, the report stated, citing people familiar with the matter. The report did not mention the deal value.
DarwinAI has developed AI technology for visually inspecting components during the manufacturing process and serves customers in a range of industries.
On Friday the market will be looking out for data on consumer sentiment and industrial production.
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