The S&P 500 and the Dow Jones Industrial Average were near flat on Friday, wrapping up a volatile week on Wall Street. A move by China to ban cryptocurrencies weighed on the technology sector and Nike shares fell as supply chain issues stemming from the pandemic hit the sneaker giant.
The blue-chip index drifted into the red 43.98 points by midday to 34,720.84
The S&P 500 lost 5.99 points to 4,442.99
The NASDAQ Composite faltered 70.24 points to 14,982.01.
The NASDAQ is down 0.4% for the week while the Dow has added 0.5% and the S&P progressed 0.3%.
Bitcoin dropped 5% and ether lost nearly 8% in reaction. Crypto-exchange Coinbase lost more than 1%. Robinhood, which last quarter got more than half of its transaction-related revenue from crypto, shed over 2%.
Meanwhile Nike validated the fears of investors worried about the pandemic wreaking havoc with supply chains and raising costs for companies, especially multinationals.
Nike shares fell over 6% after the sneaker giant lowered its fiscal 2022 outlook because of a prolonged production shutdown in Vietnam, labour shortages and lengthy transit times. Nike expects full-year sales to rise at a mid-single-digit pace, compared to low double-digit growth it forecast before.
The company also reported quarterly revenue that missed analysts’ expectations due to softening demand in North America as the delta variant flared up. Other apparel makers and retailers fell. Under Armour shed about 2%.
Within the S&P, Nike’s decline was offset by gains in reopening stocks. Carnival Corp led the index with a 4% increase while other cruise lines and air carriers rose about 3%. Energy and industrial stocks were also leaders. Mosaic and Nucorp added about 3%. Diamondback Energy rose 3% and Cabot Oil & Gas gained 2.5%.
It’s been a topsy-turvy week for markets. Stocks staged a two-day relief rally beginning on Wednesday after the Federal Reserve signaled no imminent removal of its ultra-easy monetary policy. Investors also bet that the debt crisis of China’s real estate giant Evergrande wouldn’t trigger a ripple effect across global markets.
A crackdown on bitcoin by China was hurting market sentiment overnight, especially with technology shares that depend on crypto-related revenue. China’s central bank declared all cryptocurrency related activities illegal on Friday. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said.
Prices for 10-Year Treasurys faded, boosting yields to 1.45% from Thursday’s 1.43%. Treasury prices and yields move in opposite directions.
Oil prices gained 34 cents to $73.64 U.S. a barrel.
Gold prices recovered $2.80 to $1,746.20 U.S. an ounce.