February 24, 2025

One can only blame UNH for the mixed to lower opening on Friday, as it began the day with trading lower by 60 points due to the story about it being investigated by the Justice Department for their billing practices relating to health benefits. So as the rest of the market got beaten down very badly, its stock actually did better than the opening as it ended lower by “only” 36 which is somewhat of a victory, so to speak.

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So after the lower opening, the Dow continued to get wiped out with a close of -748 down to 43,428 which unfortunately was its worst showing since last October, as the financials got wiped out again and even the energies ended lower after a higher start. And in a replay of 1961, the only stocks that had the nerve to end higher were JNJ, KO, PEP, PG and T which were examples of old-time poorly performing consumer stocks that investors fell in love with for at least one session.

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The S&P turned a pre-opening slightly higher bid into a nominal opening loss and went steadily down the drain from there to end at an awful 104 point collapse to 6013 after being basically unchanged for the week. It was hurt by declines in technology, financials and even energy came down after a higher start for its poorest showing in two months.

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The Nasdaq did even worse after it had the nerve to begin with a fast 50 point gain and it ended lower by 438 to 19, 524 on a wipeout in technology, and for some strange reason, AAPL had done better for much of the day before it got dragged slightly lower in the overall market collapse.

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The Russell 2000 was another disaster with a 66 point collapse to 2185 on the awful financial wipeout and this was a 3% decline and the VIX loved this drop in equities with a gain up to 18.21.

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Hurting the situation were reports showed that worries among consumers and businesses about the President’s policies may be hitting the U.S. economy. One suggested that U.S. business activity is close to stalling with growth at  a 17-month low. The preliminary report from S&P Global said activity unexpectedly shrank for U.S. services businesses, and many in the survey reported slumping optimism because of worries about Washington.

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“Companies report widespread concerns about the impact of federal government policies, ranging from spending cuts to tariffs and geopolitical developments and sales are reportedly being hit by the uncertainty caused by the changing political landscape, and prices are rising amid tariff-related price hikes from suppliers” were the negative comments from this organization.

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The U. of Michigan final February Consumer Sentiment Index showed that consumers are also preparing for higher inflation, in part because of potential tariffs that could raise prices for all kinds of imports. They are broadly expecting prices to be 4.3% higher 12 months from now, which is a big jump from their forecast of 3.3% inflation last month. That fits with preliminary data in the survey earlier this month as the overall number fell to 64.7.

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Among U.S. households, though, a divide is evident underneath the surface. Expectations for inflation are rising for political independents and Democrats, while falling slightly for Republicans.

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A third economic report, meanwhile, said sales of previously occupied homes were weaker last month than economists expected. Relatively high mortgage rates,  along with expensive prices for homes, have been hurting sales.

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To be sure, the U.S. stock market is still up for the young year so far and is not far from its all-time high set earlier last week. Virtually no one is forecasting a recession anytime soon. But Friday’s reports raise concerns about what’s been a remarkably resilient economy, and the losses were widespread.

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AKAM had the sharpest drop in the S&P, even though the cybersecurity and cloud computing company reported stronger profit for the latest quarter than analysts expected. It lost a fifth of its value and fell 22% as investors focused instead on its forecasts for revenue and other financial measures this upcoming year, which fell short of analysts’ expectations.

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On the winning side was CELH, which sells “better-for-you” energy drinks. It leaped 28% after saying it agreed to buy Alani Nu, a beverage company that focuses on female customers. Analysts called the purchase price, $1.65 billion net of tax effects, reasonable and said the deal should quickly add to profits for the former, which also reported its latest quarterly results.

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Before Friday’s sharp drop, the S&P 500 had been heading for a week of almost zero movement. Helping to lift stocks had been a steady parade of better-than-expected profit reports. That helped offset worries about stubbornly high inflation, which could prevent the Fed from delivering more relief for the economy through lower rates.

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Treasury yields fell in the bond market following Friday’s weaker-than-expected economic reports. The yield on the 10-year Treasury sank to 4.42 % from 4.51% late Thursday.

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Hong Kong’s Hang Seng jumped 4% for one of the world’s largest moves,, boosted by a surge for e-commerce firm BABA, which reported stronger profit for the end of last year than expected. It also talked up its AI developments.

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The fourth-quarter earnings season finally comes to an end with the following – today: DPZ, DVN, OC; Tuesday – SAM, HSIC, INTU, PSG,  Dow component HD, WDAY; Wednesday – CHE, EBAY, LOW, TJX and  Dow components, NVDA and CRM; TJX; Thursday – ADSK, DELL, ADSK,  JMS.

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Economic reports will see: today – February Dallas Fed Survey; Tuesday – February Consumer Confidence; Wednesday – January new home sales; Thursday – January durable goods orders, weekly jobless claims, 4Q G.D.P; Friday – January Personal Income report (P.C.E.), which is always important to the Fed.