Stocks opened higher Friday as investors took in the latest inflation update and the first round of fourth-quarter earnings. The enthusiasm faded into the long weekend, though, with the main indexes ending far from where they started.
Ahead of the open, data from the Bureau of Labor Statistics showed the December Producer Price Index (PPI), which measures what businesses are paying suppliers for goods, was down 0.1% on a month-to-month basis, and up 1.0% on an annual basis. The monthly figure matched what was seen in November, while the yearly number was greater than the 0.8% rise from the previous month.
Core PPI, which excludes volatile food and energy prices, was unchanged vs November's 0.1% increase. Year-over-year, core PPI was up 2.5%, above what was seen the month prior.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
"The PPI data has repaired the damage done by yesterday's Consumer Price Index (CPI) data which came in a little higher than expected," says Craig Erlam, senior market analyst at OANDA. "But it's clear from today's readings that disinflationary pressures remain in the pipeline, which should give the Fed confidence over the coming months that inflation is heading back to target."
Delta Air Lines spirals on lower profit outlook
The start of fourth-quarter earnings season was also in focus Friday. JPMorgan Chase (JPM, -0.7%) and Bank of America (BAC, 1.1%) stocks each closed lower despite the big banks reporting bottom-line beats.
Delta Air Lines (DAL), meanwhile, nosedived 9.0% after the air carrier's Q4 results. For the three-month period, Delta reported higher-than-expected earnings of $1.28 per share on $13.7 billion in revenue. It also forecast first-quarter earnings that are inline with analysts' expectations. Sparking today's selloff, though, was DAL's guidance for full-year earnings per share of $7, which is lower than what it projected at its June Investor Day.
Analysts likely aren't too concerned about today's decline. Delta remains in the minority as one of Wall Street's Strong Buy stocks, with analysts highly bullish on the air carrier. Of the 21 analysts covering DAL tracked by S&P Global Market Intelligence, 15 say it's a Strong Buy, five call it a Buy and one has it at Hold. And the average price target of $53.40 represents implied upside of nearly 40% to current levels.
UnitedHealth drags on Dow
Elsewhere, UnitedHealth Group (UNH) was one of the worst blue chip stocks today, slumping 3.4%. The health insurance giant reported fourth-quarter earnings of $6.16 per share on $94.4 billion in revenue, more than analysts were expecting.
However, the company's medical cost ratio (MCR), which measures medical costs as a percentage of premium revenue, came in above estimates. A higher MCR means a company is paying more from premiums to cover the cost of claims. For all of 2024, UNH is guiding for an MCR of 84%, "reflecting higher medical utilization and ongoing headwinds from a Medicare rate change," says CFRA Research analyst Daniel Rich (Hold).
At $521 per share, UNH has the biggest impact on the price-weighted Dow Jones Industrial Average. As a result, the 30-stock index lagged today, shedding 0.3% to 37,592. The Nasdaq Composite (+0.02% at 14,972) and the S&P 500 (+0.08% at 4,783) ended with marginal gains.
As a reminder, Monday is a stock market holiday with both the equities and bond markets closed for Martin Luther King Jr. Day.
Related content
- Cannabis Trends to Watch For in 2024
- Kiplinger's Earnings Calendar for This Week (Jan. 15-19)
- Save $40 On A Costco Membership With This Deal
-
No Passport? No Problem. Seven US Getaways That Feel Like an International VacationFrom Puerto Rico’s Caribbean flair to Santa Fe’s old world charm, these American destinations deliver a global travel experience — without the hassle of customs or currency exchange.
-
I have to take a $22,000 RMD by the end of the year and I don't need the money. What should I do with it?We ask financial experts for advice.
-
Stocks Rise to End a Volatile Week: Stock Market TodayThe market's fear index reached and retreated from a six-month intraday peak on Friday as stocks closed the week well.
-
Dow Sinks 301 Points on Trade War Talk: Stock Market TodayThe contentious relationship between the world's two biggest economies continues to drive global financial markets.
-
Trade Uncertainty Sparks Whipsaw Session: Stock Market TodayVolatility is making a cameo here in mid-October, a generally positive month marked by its historic stock market events.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Stocks Swing in Volatile Session: Stock Market TodayThe main indexes fell sharply in early trading on rising China tensions, but rebounded thanks to encouraging bank earnings.
-
Dow Adds 587 Points as Stocks Bounce: Stock Market TodayThe main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
Dow Dives 878 Points on Trump's China Warning: Stock Market TodayThe main indexes erased early gains after President Trump said China is becoming "hostile" and threatened to cancel a meeting with President Xi.
-
Stocks Retreat as Shutdown Continues: Stock Market TodayWhile the main indexes closed lower today, Delta and PepsiCo gained ground on encouraging earnings reports.
