Dow closes nearly 170 points higher, S&P 500 and N

The S&P 500 eked out a narrow gain in Friday’s session but still had the worst week in nearly two months.

The broad index was up just 0.2% to end the session at 4,090.46. The Nasdaq Composite slipped 0.61% to close at 11,718.12. The Dow Jones Industrial Average advanced 169.39 points, or 0.5%, to end at 33,869.27.

Despite the Dow’s Friday gain, it still ended the week down 0.17%. The S&P 500 and Nasdaq Composite lost 1.11% and 2.41%, respectively, in what was their worst week since December.

Investors digested the most recent interest rate hike, economic data and recent commentary from Federal Reserve speakers, said Shana Sissel, founder of Banríon Capital Management. That caused intraday moves, she said, as investors changed positions while predicting how the central bank will act on interest rates going forward.

“There’s some mixed signals here, which I think is why volatility is up,” Sissel said. “There’s not really a consensus coming out with leading indicators that give you a lot of confidence of what’s coming next. And the markets hate that.”

Ride-hailing platform Lyft tanked more than 36% after a disappointing fiscal fourth-quarter report. Expedia also saw its shares fall by more than 8% after its earnings and revenue fell below analysts’ expectations.

Those are the latest reports in what has been considered an underwhelming quarter by Wall Street. With nearly 70% S&P 500 companies reporting, around 70% of those companies beat analyst expectations for the quarter. That’s a smaller share of companies surpassing expectations than the three-year historical average of 79%, according to The Earnings Scout.

WTI had its strongest week since October

WTI closed on Friday with its best week since October.

It rose 8.63% this week, marking its strongest week since Oct. 7, when WTI gained 16.54%. This was also its first positive week in three weeks.

WTI settled up 2.13% at $79.72 and hit a session high of $80.33. This was the highest level since Jan. 30, when it traded as high as $80.49.

All eyes are on inflation data next week

Looking ahead to next week, investors are already readying for the latest consumer price index reading to see if inflation once again cooled.

The January reading for the index, which follows the prices of a wide basket of goods as a gauge of inflation, is due Tuesday. Economists polled by Dow Jones forecast a 0.4% increase in headline CPI on a monthly basis and a 6.2% gain from the prior year.

“Next week is really all about one thing, and that one thing is CPI,” said Scott Ladner, chief investment officer at Horizon Investments.

Market observers also expect the CPI reading to help dictate the Federal Reserve’s next move on interest rates. The central bank last implement a 25 basis point interest rate hike, while Fed Chair Jerome Powell noted inflation was starting to come down but had a ways to go.

Emmanuel Cau, an analyst at Barclays, said inflation data will likely be a market catalyst going forward.

“More than the central banks’ rhetoric, we think it is the inflation data that will dictate the direction of travel for markets from here,” he said in a note to clients Friday.

CNBC Pro subscribers can read more about what to expect in the coming week here.

— Alex Harring

Energy is sole S&P 500 sector on pace for a winning week

The S&P 500 is down 1.4% so far this week, on pace to post its worst weekly performance since December. Energy is the only of its 11 sectors set to end the week up.

The sector is on track to advance 4.5% this week. A notable chunk of that is from a 3.4% advance seen so far in Friday’s session, during which it was also the best performer.

Phillips 66 led the sector this week, adding more than 7%. Marathon, Diamondback and EOG followed, trading just under 6.8% in the green compared with the start of the week.

On the opposite end, consumer services is on pace to perform the worst of the 11 sectors this week, currently down 6.5%. Lumen is the biggest laggard in the sector, plummeting just under 25% so far this week.

— Alex Harring

Analysts bail on Lyft after latest earnings

Wall Street analysts say Lyft has no excuses for its poor guidance.

Lyft shares fell more than 30% Friday as traders weighed a weaker-than-expected forecast from the ridesharing company in its most recent earnings report. The firm otherwise reported a revenue beat.

The ridesharing company said it expects to make about $975 million in revenue in the fiscal first quarter of 2023, or lower than the $1.09 billion consensus estimate from analysts, according to StreetAccount. Lyft also forecasted an adjusted EBITDA between $5 million and $15 million in the first quarter.

Given this, market observers pointed out that Uber might be better positioned to take advantage of a broader recovery in ridesharing, as Lyft appears to be falling behind.

“The mea culpa by management seems to be that the business was over-earning on inflated prices amidst supply-constraints (surge pricing), an issue they had downplayed to then apparently be taken by surprise,” wrote Loop Capital’s Rob Sanderson, one of several analysts who downgraded the stock.

CNBC Pro subscribers can read the full story here.

The stock declined more than 9% in Friday’s session.

— Sarah Min

Wall Street could be entering a new bull market, technical strategist says

Many Wall Street strategists have been skeptical of the rally to start 2023, but some technical indicators suggest it might have serious staying power.

“Despite what might seem a logical expectation of lower prices, the market action has been quite impressive to the upside,” Frank Gretz, technical analyst at Wellington Shields, said in a note to clients.

Gretz pointed out that the majority of NYSE stocks are trading above their 200-day moving average, and that new 12-month highs are lapping new 12-month new lows on both the NYSE and the Nasdaq.

“We just don’t see these numbers fitting in with the ongoing bear market thesis. Without meaning to be too convoluted semantically, a big new leg down here would almost seem a new bear market, rather than a continuation of the old one,” the note said.

— Jesse Pound

Consumer spending strengthened in January, Bank of America says

Credit and debit card data from January suggests the U.S. consumer is not about to roll over, according to a note from David Tinsley, senior economist at Bank of America Institute.

“We have seen signs of a strengthening in consumer spending at the start of this year – Bank of America credit and debit card spending per household rose 5.1% year-over-year (YoY) in January, compared to 2.2% YoY in December. Total payments across all channels (Automated Clearing House (ACH), Bill Pay, Credit and Debit Card, Wires, Person-to-Person, Cash and Check) grew 7.5% YoY,” the note said.

Those year-over-year improvements could be due in part to a Covid wave that hit parts of the country in January 2021, but the larger picture still points to a resilient consumer, according to Tinsley.

“More broadly, the data suggests that while lower income consumers are pressured, they still have solid cash buffers and borrowing capacity. Even for the lowest income cohorts this should provide support for some time yet,” the note said.

— Jesse Pound

Bank of America downgrades Deutsche Bank

Bank of America downgraded shares Deutsche Bank to underperform from neutral, as the European bank deals with challenges around profitability.

“We see Deutsche Bank struggling to improve profitability as growth is heavily volume reliant, consuming cost and capital resources. This likely limits RoTE to 6-7% with weak profitability and regulatory headwinds constraining capital distribution,” analyst Rohith Chandra-Rajan wrote in a Friday note.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Consumer outlook improves in February, though inflation outlook up as well

Consumer sentiment has risen in February but so have short-term inflation expectations, according to a closely watched gauge.

The University of Michigan Index of Consumer Sentiment’s preliminary reading was 66.4 for the month, up from 64.9 in January and ahead of the Dow Jones expectation for 65.1. The current conditions index jumped to 72.6 from 68.4 in January, while the future expectations index edged lower to 62.3, down from 62.7.

On the inflation side, the one-year inflation expectations gauge increased to 4.2%, up from 3.9% in January. However, the five-year outlook was unchanged at 2.9%.

—Jeff Cox

Affirm falls after Morgan Stanley downgrade

Affirm shares fell more than 3% after Morgan Stanley downgraded the buy now pay later company to equal weight from overweigh.

“BNPL [Buy Now, Pay Later] can be a great way to give younger consumers and those with limited credit history access to purchasing credit, and Affirm’s BNPL’s structure helps establish behavior and repayment discipline,” the bank said.

However, by limiting its offering to BNPL and developing products that have substantially different features (e.g. Debit+) than what has been broadly adopted by the market (i.e. revolving credit), the challenges to customer education and adoption rise,” Morgan Stanley said.

— Sarah Min

Gold still on pace for 7th up week in 8; natural gas off 46% in 2023

April gold futures eased 0.65% to $1,878.5 the ounce on Thursday after touching an intraday low of $1,870.9, but remain higher by 0.1% week-to-date, on pace for the seventh advance in eight weeks.

Gold is up almost 3% in 2023.

March natural gas contracts added 1.4% Thursday to $2.43 per thousand cubic feet, on pace for the first weekly advance in eight weeks. Natural gas remains about 46% lower in 2023.

— Scott Schnipper, Gina Francolla

Solus Alternative’s Dan Greenhaus makes the bull case for stocks

Dan Greenhaus, Solus Alternative Asset Management chief strategist, believes the technicals in the stock market have turned more bullish.

“Historically it’s very unusual to see the S&P 500 itself get this far above the 200-day moving average this deep in a bear market and not have it be the end,” Greenhaus said on CNBC’s “Closing Bell Overtime.”

The 200-day moving average is a widely watched momentum indicator. The S&P 500 is now nearly 4% above its 200-day moving average of 3,945, after climbing more than 6% year to date.

— Yun Li