U.S stocks ended mixed albeit little changed on Friday, as investors remain cautious ahead of important corporate reports due this week. According to NextCandle.com's forecast, U.S indices should finish lower on Monday: the Dow was given a 56% probability of hitting a lower target, edging down from 13328.85 to 13296.43. The S&P 500 was also given a 71% probability of hitting a lower target, dropping down from 1428.59 to 1425.53, and finally Nasdaq was also given a 67% probability of hitting a lower target, sliding down from 3044.11 to 3039.58.
Grim outlook for third quarter earnings
This week, 12 Dow companies, including financial giants Bank of America (BAC) and American Express (AXP), chipmaker Intel (INTC) and global conglomerate General Electric (GE), are due to release third quarter earnings and sales reports.
Furthermore, about 80 S&P 500 component companies will announce their quarterly results, namely banking giants Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS). According to forecast, the companies in the S&P 500 are expected to report earnings 1% lower than last year, which would be the weakest quarter since 2009.
Any further gloomy news is likely to entail a negative reaction in the market. If earnings turn out to be disappointing, there is a chance that the market will keep on selling off.
U.S stocks remain little changed
Early Friday morning, stocks gained momentum due to a better-than-forecast U.S. consumers sentiment index for October, which rose to 83.1, its highest level since 2007, instead of the predicted 78.3.
The Labor Department indicated that the producer price index in September rose 1.1%, which is higher than expected. This unexpected increase could be due to sharp increases in food and energy prices. On the other hand, the prices of finished goods remained unchanged.
U.S indices closed practically flat on Friday ahead of quarterly earnings results: the S&P 500 slipped 0.30%, from 1,432.84 to 1,428.59; the Dow remained practically flat, with a 0.02% gain from 13326.39 to 13,328.85. Finally, Nasdaq retreated 0.17%, from 3049.41 to 3,044.11.
European stocks finished in the red on Friday: Germany's DAX pulled back 0.68%, France's CAC 40 shed 0.72%, and finally Britain's FTSE 100 fell 0.62%. Across the Pacific, Asian stocks ended mixed on Friday: the Shanghai Composite was little changed, with a 0.10% gain, Hong Kong's Hang Seng added 0.65%. Japan's Nikkei, however, shed another 0.15%.