Stocks End Week on High Note…..

U.S. stocks finished out a down week on a positive note that came amid hotter-than-expected October inflation reports out of the U.S. and China. Investors also sifted through other economic reports released today that showed November consumer sentiment hit a 10-year low, and job openings remained robust as a record number of workers quit their jobs. The headlining story on the equity front was the announcement from Dow member Johnson & Johnson that it will split its consumer health business into a separate publicly-traded company. Treasuries were mostly lower to modestly steepen the yield curve after the bond markets were closed yesterday for Veterans Day. The U.S. dollar was slightly lower, while gold saw a modest increase, and crude oil prices finished to the downside. Markets in Europe and Asia finished mixed to close out the week.

The Dow Jones Industrial Average rose 179 points (0.5%) to 36,100, the S&P 500 Index increased 34 points (0.7%) to 4,683, and the Nasdaq Composite gained 157 points (1.0%) to 15,861. In moderate-to-light volume, 3.7 billion shares of NYSE-listed stocks were traded, and 5.3 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.80 to $80.79 per barrel. Elsewhere, the gold spot price advanced $3.10 to $1,867.00 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.1% lower at 95.11. Markets were lower for the week, as the DJIA declined 0.6%, the S&P 500 decreased 0.3%, and the Nasdaq Composite shed 0.7%.

The November preliminary University of Michigan Consumer Sentiment Index decreased to 66.8, versus the Bloomberg estimate calling for a modest rise to 72.5 from October’s 71.7 reading. The index hit a ten-year low as both the current conditions and the expectations portions of the index deteriorated. The 1-year inflation forecast rose to 4.9% from October’s 4.8% rate, matching forecasts, and the 5-10 year inflation forecast remained at the prior month’s 2.9% level.

The University of Michigan said, “Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”

As labor shortage remains a drag on business sentiment, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, showed a retreat to 10.44 million jobs available to be filled in September, from August’s upwardly-revised 10.63 million rate. However, the consensus estimate called for a 10.30 million level. The report showed the hiring rate remained at August’s 4.4%, and separations rose to 4.2% from the prior month’s 4.1% pace. The quit rate increased to 3.0% from August’s 2.9% rate as a record 4.4 million quit their jobs, according to Bloomberg.

Treasuries dipped after the bond markets were closed yesterday for the Veterans Day holiday. The yield on the 2-year note was little changed at 0.51%, while the yield on the 10-year note ticked 2 basis point (bp) higher to 1.58%, and the 30-year bond rate rose 4 bps to 1.95%.

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