Day Traders Diary

10/21/22

The major averages climbed on Friday as Wall Street closed a volatile week on a high note despite some disappointing earnings reports. The Dow Jones Industrial Average gained 748 points, or 2.47%, to close at 31,082. The S&P 500 rose 86 points or 2.37% to 3,752. The Nasdaq Composite added 244 points or 2.31% to 10,859.

Friday's moves extended the market's gains for the week. The S&P 500 and Dow gained 4.7% and 4.9%, respectively, while the Nasdaq rose 5.2%. It was the best week since June for all three major averages.

The advance came despite the 10-year Treasury yield surging to its highest level since 2008 and a mixed bag of corporate earnings reports.

Bank stocks were a bright spot on Friday, with Goldman Sachs gaining 4.6% and JPMorgan Chase adding 5.3%.

Earnings reports limited gains for the market. Dow components American Express and Verizon fell 1.5% and 4.5%, respectively, after their quarterly reports. In tech, social media company Snap fell 28% after reporting a quarterly revenue of $1.13 billion, below expectations.

Treasury yields fell from their highs on Friday morning after a report from the Wall Street Journal that some Fed officials are concerned about overtightening with large rate hikes. That report appeared to boost equities as well.

The central bank's aggressive rate hikes have been a major factor in stocks falling into a bear market this year, and traders have continued raising their estimates of where the Fed will stop.

Stocks closed broadly higher on Friday, with the Dow gaining more than 700 points. The moves on Friday gave the Dow, S&P 500 and Nasdaq Composite their best week since June.

Did bond yields just peak? Some strategists say yes

The sharp reversal in the 10-year yield Friday may be a signal that Treasury yields have temporarily topped out, after a wild ride higher this week.

The 10-year touched a high of 4.33% in morning trading and was at 4.20% in afternoon trading. The yield ended last week at 4.02%.

The yield moved lower Friday, as investors reacted to a Wall Street Journal article and comments from San Francisco Fed President Mary Daly, who said the Federal Reserve could begin to slow the pace of hikes. An article in the Wall Street Journal also suggested the Fed could consider a smaller hike in December, after it raises its fed funds target rate by three quarters of a point in November.

Scott Redler, who follows short term technicals, said yields appeared to show signs of peaking, and that would be positive for stocks.

A slew of stocks including Exxon Mobil notched fresh all-time highs during Friday's trading session.

The oil stock last rose 1.9% and traded near levels dating back to its listing in 1920. Shares of defense contractor Northrop Grumman

 also hit their highest level since the 1994 merger between Northrop Aircraft and Grumman Aerospace.

Here are some of the other stocks notching fresh or recent highs in Friday's trading session: