Wall Street closed higher on Friday before the Christmas break but the S&P 500 was down 0.2 percent and the Nasdaq Composite by 2 percent during the week, making it their third straight weekly decline.
However, the Dow Jones Industrial Average performed well with a 0.9 percent gain during the same period.
On Friday, the benchmark S&P 500 erased earlier losses to end 0.6 percent higher to 3,844.82, eventually dragging the tech-heavy Nasdaq Composite with it by 0.2 percent to close at 10,497.86. Volumes were generally light as year-end holidays began in earnest.
Meanwhile, the Dow Jones Industrial Average closed 176.44 points higher, or 0.5 percent, to 33,203.93.
The major indexes oscillated earlier in the session after the core personal consumption expenditures price index, the Federal Reserve’s preferred gauge of inflation, came in slightly hotter than economists expected on a year-over-year basis, indicating that inflation is sticking despite the Fed’s efforts to fight it.
According to Louis Navellier of Navellier & Associates, “The economic numbers announced today highlight the difficulty for investors today, where weak numbers bring recession fears and strong numbers bring Fed fear.”
“You just can’t win right now on macro numbers,” he added. “That is why it’s now much more of a stock-picking market, but with all the index and ETF traders even stocks that are executing their business plan well can get pushed around meaningfully by associated losers.”
Recession fears have resurged recently dashing some investors’ hope for a year-end rally and leading to big losses in December. Investors worry that overtightening from central banks worldwide could force the economy into a downturn.
For December, the S&P 500 has lost 5.8 percent, while the Dow and Nasdaq have lost more than 4 percent and 8.5 percent respectively. Those are the biggest monthly declines for the major averages since September. Stocks are also on pace for their worst annual performance since 2008.