Joey Solitro
Stocks headed steadily lower throughout Friday's session, pressured by disappointing economic data. A round of negative earnings reactions weighed on the main benchmarks, too, with all three ending the day and the week with notable losses.
It was a busy morning on the economic calendar. Shortly after the open, S&P Global said its Flash Manufacturing Purchasing Managers Index (PMI) rose to 51.6 in February from 51.2 in January. Its Flash Services PMI, on the other hand, declined to 49.7 in February from 52.9 in January – marking the first contraction of activity in the services sector in more than two years.
"New business inflows into the services sector came close to stagnation," said S&P Global in its report. Service providers cited political uncertainty surrounding federal spending cuts and the impact of potential Trump policies on the economy and inflation as the reasons for the slowdown, the data provider added.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Elsewhere, the National Association of Realtors said existing home sales decreased 4.9% month over month in January, to a seasonally adjusted rate of 4.08 million.
"Existing home sales offered little hope for a real estate recovery as elevated financing charges and costly properties are hampering affordability for prospective buyers," says José Torres, senior economist at Interactive Brokers.
Consumer sentiment was worse than we thought
But it was the University of Michigan's Consumer Sentiment Index that Wall Street really reacted to. The revised reading showed consumer sentiment fell to 64.7 in February from 71.7 in January – a steeper decline than what was seen in the preliminary data.
It also reiterated a 15-month high in year-ahead inflation expectations (4.3%) and an uptick in the long-term inflation outlook, to 3.5% in February from January's 3.2%.
"All five index components deteriorated this month, led by a 19% plunge in buying conditions for durables, in large part due to fears that tariff-induced price increases are imminent," said Surveys of Consumers Director Joanne Hsu.
Block suffers worst day in five years after earnings
In single-stock news, Block (XYZ) shares slumped 17.7% – their worst day since 2020 – after the payments systems provider missed top- and bottom-line expectations for its fourth quarter, though CashApp revenue growth came in strong. XYZ also gave uninspiring guidance.
Still, Oppenheimer analyst Rayna Kumar maintained an Outperform (Buy) rating on the fintech stock after earnings. "Square's gross payment volume growth should accelerate through efforts like expanding U.S. sales teams, boosting international sales presence, and increasing partnerships," Kumar said.
Additionally, the company is "well-positioned for share gains, with growing monetization of its products and the still-low penetration of its total addressable market."
UnitedHealth stock sinks on DOJ drama
UnitedHealth Group (UNH) stock plunged 7.2% after a report in The Wall Street Journal indicated the Justice Department is investigating the health insurer over its Medicare billing practices.
The Justice Department has not confirmed the investigation. In a statement, UnitedHealth said, "The Wall Street Journal continues to report misinformation on the Medicare Advantage (MA) program," and that "any suggestion that our practices are fraudulent is outrageous and false."
At roughly $465 a share, UNH has the biggest influence on the price-weighted Dow Jones Industrial Average – which is why the 30-stock index plunged 1.7% to 43,428. However, selling was broad-based, with the S&P 500 losing 1.7% to 6,013 and the Nasdaq Composite surrendering 2.2% to 19,524.
Related content
- Earnings Calendar and Analysis for This Week (February 24-28)
- Coinbase Stock Swings After SEC Drops Lawsuit
- McDonald's Stock: How Small Changes Have Led to 100,000% Returns
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff NoiseMarkets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Amtrak Joins Prime Day With Deals on Fares — But You’ll Have to Act FastPrime members can score 20% off midweek fares — what travelers should know before booking.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff Noise
Markets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Dividend Increases: 7 Stocks With Rising PayoutsWhile dividend growth has been slowing, certain stocks have raised their dividend payouts. These are some selections.
-
Key to Financial Peace of Mind: Think 'What's Next?' Rather Than 'What If?'Even if you've hit your magic number for retirement, it's hard to stop worrying about money. Giving it a clear purpose is one way to reduce financial anxiety.
-
Three Estate Planning Documents a Business Owner Can't Afford to SkipA business owner's estate plan should protect the company and its employees as well as the entrepreneur's heirs. These three documents are critical.
-
Stock Market Today: Trump's Copper Comments Cause a StirMarkets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Opportunity Zones: An Expert Guide to the Changes in the One Big Beautiful BillThe law makes opportunity zones permanent, creates enhanced tax benefits for rural investments and opens up new strategies for investors to combine community development with significant tax advantages.
-
Five Ways Retirees Can Keep Perspective Through Market JittersMarket volatility is a recurring event with historical precedents (the dot-com bubble, global financial crisis and pandemic), each followed by recovery. Here's how people who are near or in retirement can navigate economic uncertainty.
-
Stock Market Today: Trump Reextends His Tariff DeadlineWhen it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."
