U.S stocks closed Friday's session practically flat, as investors stand back amid disappointing earnings reports and ahead of the nearing presidential elections. Due to hurricane Sandy, the market was closed on Monday and Tuesday and will reeopen on Wednesday. According to NextCandle.com's stock forecast, U.S indices should end little changed on Wednesay as well: both the Dow and the S&P 500 were given a neutral 50% probability of movement, either upward or downward. Nasdaq, however, was given a 60% probability of hitting a lower target, sliding down from 2987.95 to 2961.16.
The market is preparing to open after Hurricane Sandy hit
Friday's session was bumpy for U.S. stocks, which after going back and forth between minor gains and losses, ended the day little changed, but posted another week of losses amid feeble corporate earnings.
So far, over half of the S&P 500 components have reported third-quarter corporate results. Although more than two thirds have submitted earnings above analysts' estimates, only one third have topped sales forecasts, which is well below the 55% average of S&P 500 companies that usually top earnings estimates. To make matters worse, outlooks for performance in the fourth quarter don't seem to be much brighter.
Such stale results have heightened investors' wariness and has pushed them to the sidelines. With limited activity from market participants, all three indices logged their second weekly loss. Traders know better than to take major risks ahead of the U.S. presidential elections, as concerns about the looming fiscal cliff maintain the market under pressure. Amid overall uncertainty, stocks are headed to finish October in negative territory, which would be their first monthly loss in over four months.
Friday's session was choppy as investors kept their eye on earnings but also took in a mixed slew of economic data: while a better-than-expected report on U.S. economic growth was encouraging, consumer sentiment missed economists' estimates. The U.S Bureau of Economic Analysis indicated that gross domestic product, an extensive measure of economic growth, rose at a 2% annual rate in the third quarter.
A preliminary reading of 83.1 for consumer sentiment in October was revised and brought down to 82.6. Although the final figure disappointed analysts who were expecting it to remain unchanged, the reading indicates improvement in comparison to the previous month.
Global stocks end mixed
On Friday, U.S indices ended practically unchanged as investors refrained from making any big bets ahead of the presidential election and the looming fiscal cliff: the S&P 500 shed 0.30%, dropping from 1412.97 to 1411.94, the Dow edged up 0.03% from 13103.68 to 13107.21, and finally, Nasdaq inched up 0.06%, from 2986.12 to 2987.95.
European stocks finished higher on Tuesday: Germany's DAX added 1.13%, France's CAC 40 surged 1.48%, and finally Britain's FTSE 100 rose 0.95%. Across the Pacific, Asian stocks closed Tuesday's session mixed: the Shanghai Composite rose 0.17%, Hong Kong's Hang Seng shed 0.38%, and Japan's Nikkei slumped 0.98%.