Stock indexes saddled with losses
NEW YORK – U.S. stock indexes on Friday notched weekly losses after earnings reports did little to offset worry about the global economy.
“When you saw these solid companies reporting basically negative revenue growth, it painted a very clear picture that the global economy is growing at a very modest rate,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management, pointing to Dow components International Business Machines Corp. and McDonald’s Corp. as among those setting the tone for third-quarter earnings.
“Investors are adjusting to a sluggish growth environment and focused on earnings, and it’s clear the global economy is in a slowdown,” Skrainka said.
Finishing with a weekly drop of 1.8 percent, the Dow Jones industrial average added 3.53 points to end at 13,107.21.
“Over the last several months, investors have focused on the Federal Reserve, and the Fed going all in. Now the recognition is taking hold that quantitative easing has less and less effect at this stage of the game, and the troubles in Europe, the slowdown in China and the year-end issues facing the U.S. provide the fuel for this correction,” Skrainka said.
Down 1.5 percent for the week, the S&P 500 index fell 1.03 points to 1,411.94.
Down 0.6 percent from the week-ago finish, the Nasdaq composite rose 1.83 points, or less than 0.1 percent, to 2,987.95, leaving it with its third consecutive weekly loss.
Data had the U.S. economy expanding more than forecast in the third quarter and consumer sentiment rising in October.
“The good news is the consumer was more active in the third quarter than the consumer was in the second quarter. We expected good news and this is better news; the only caveat is part of the increase is government spending, and that is going away,” said Art Hogan, market strategist at Lazard Capital Markets.