Stock Market Closes Higher On Bevy Of Economic Data But No Santa Claus Rally Yet; Oil Stocks Gain

The stock market closed slightly higher Friday after a slew of mixed economic data gave little indication that Santa Claus will be arriving in the market anytime soon. Oil giants ConocoPhillips (COP), Chevron (CVX) and Exxon Mobil (XOM) were among the day’s top stocks.

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The Nasdaq composite closed up 0.2% while the S&P 500 gained 0.6%. The Dow Jones Industrial Average added 0.5%. The small-cap Russell 2000 index gained 0.3%.

The Nasdaq composite and S&P 500 are trading at their lowest levels since early November. It was the third-straight week of weekly declines for the Nasdaq and the S&P but the Dow surprised with a weekly gain of 0.85%. On the week, the S&P 500 closed down 0.2% while the Nasdaq dropped 1.9%.

Volume fell on the Nasdaq and the NYSE vs. the same time on Thursday as investors got an early start on the three-day holiday weekend, early data showed.

The yield on the benchmark 10-year Treasury note rose seven basis points to 3.75%. Crude oil prices rose 2.8% to $79.65 per barrel.

The Santa That Didn’t Come

November Personal Consumption Expenditures (PCE) rose 0.1% as reported Friday, vs. the 0.2% projected. The Bureau of Economic Analysis’ PCE looks at the flow of durable goods, nondurable goods and services.

Core inflation also rose by 0.1%, lower than the 0.2% consensus. November’s annual PCE rate of 5.5% was in line with expectations, while the core CPI inflation rate hit 4.7%, higher than the 4.6% consensus.

Month-over-month personal income rose 0.4% in November vs. 0.3% consensus, showing continued strength in consumer wealth. Personal income includes wages and salaries, employer contributions to private pension plans, rental income, dividends and interest.

Durable goods orders fell 2.1%, a bigger drop than the 0.8% consensus. This data forecasts how busy factories will be in upcoming months, offering insight into demand for items such as refrigerators and cars. It also looks at business investments such as industrial and electrical machinery, and computers.

“It was surprising that the equity sell-off this week was underpinned by heavy volume,” said Quincy Krosby, chief global strategist for LPL Financial. “Typically, volume subsides as trading desks globally thin out during the Christmas/New Year holiday season. A clutch of solid economic data including a surprisingly solid GDP report, lower than expected continuing claims, and personal consumption data that suggests a still resilient consumer, coupled with higher expectations, had the market veer instantly into the “good news is bad news” scenario.”

Odds for a 25-basis-point hike by the U.S. Federal Reserve at the February meeting stand at 66.4%. That would take the yield to the 4.5%-4.75% range. Meanwhile, 33.6% are looking for a 50-basis-point hike, according to the CME FedWatch Tool.

All 11 S&P stock market sectors gained ground Friday. The S&P Energy Select Sector ETF (XLE) was the best-performing sector, up 3.2%.

Investors Getting Oil In Their Stockings

Energy producer ConocoPhillips gained 4.3% in Friday’s stock market. This S&P 500 leader is finding resistance at its 21-day exponential moving average.

Dow Jones component Chevron was up 3.1%. Shares are in a newly-formed flat base and finding support at its 21-day exponential moving average.

Exxon Mobil gained 2.7% as shares built within a flat base with a buy point of 114.76.

Oil & gas royalty trust Permian Basin Royalty Trust (PBT) shot up 8.4% and is now extended past its 23.18 buy point.

Tesla (TSLA) shares fell another 1.8% Friday. Tesla suffered its worst weekly decline since the Covid crash for a second straight week, amid ongoing concerns about demand and Elon Musk’s impact on the EV giant’s brand. Musk said he would look for a new CEO  for Twitter, which he recently bought, following a poll of Twitter users. And later said he would not sell any more TSLA stock until at least 2024.

Investors have already lost nearly $700 billion on the stock this year. Shares of the electric-auto maker have dropped more than 60% this year. That wipes out gains going back to 2020.

The Innovator IBD 50 ETF (FFTY) gained 0.3%, lifted a bit by Toro (TTC) but dragged down by Neurocrine Biosciences (NBIX).

Toro rose 1.7% after the company reported better-than-expected fiscal Q4 2022 adjusted EPS, but missed the consensus sales estimate. Raymond James upgraded the snowblower and landscaping heavy equipment maker’s stock to outperform, adding a 130 price target. In addition, TTC stock is in the 5% buy zone after hitting the 107.86 buy point of a cup-with-handle base.

Severe weather on the East Coast put pressure on airlines stocks but they held up despite the weather.

Carriers are canceling thousands of flights due to freezing temperatures and snow across large swathes of the country. But airlines seemed to hold onto slight gains including United Airlines (UAL), Delta Air Lines (DAL), JetBlue Airways (JBLU) and American Airlines (AAL) hung onto slight gains.

Southwest Airlines (LUV) gained 1.8% and is still trying to gain support from its 50-day line.

Some 4,845 U.S. flights scheduled for Friday had been canceled as of 4 p.m. ET, according to FlightAware, a flight tracking site.

Stock Market Movers: Amazon, Chip Stocks, AMC

Amazon (AMZN) stock gained 1.8% as hopes for a Santa Claus rally continue, despite weak price action. Heavy snowstorms have prevented consumers from venturing to shopping malls. Presumably, they are buying more holiday gifts online.

Dow Jones tech leader Apple (AAPL) fell 0.3%.

Nutanix (NTNX) dropped 8% on news that Hewlett Packard Enterprise (HPE) halted talks to acquire the enterprise cloud platform. HPE shares closed up 0.3%.

Nvidia (NVDA) sank another 0.9%, on top of yesterday’s 7% decline. Chip stocks fell in sympathy with Micron Technology (MU) after the memory giant reported disappointing fiscal Q1 2023 numbers on Wednesday.

Shares of meme stock AMC Entertainment (AMC) fell another 10.4%, adding to the stock’s 15% plunge Thursday. It fell Thursday after the movie theater operator announced a $110 million equity capital raise. The meme stock said it also was asking the company’s board of directors for a 1-for-10 reverse split of its common stock.

Follow Michael Molinski on Twitter @IMmolinski

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