S&P 500 closes higher on Friday, but ends week with losses

The Dow Jones Industrial Average rose 199.37 points, or 0.6%, to 33,745.69 to end the day Friday, while the S&P 500 climbed 0.5% to 3,965.34. The Nasdaq Composite finished just 0.01% above the flat line at 11,146.06.

All of the major averages posted down weeks. The Dow was flat, ending 0.01% lower. The S&P 500 lost 0.7% or the week, while the Nasdaq ended 1.6% lower. All three indexes are positive for the month, however.

— Tanaya Macheel

The iShares MSCI Taiwan ETF has had one of its best weeks of the year, raking in more than $570 million of inflows, according to FactSet. The fund has also gained about 1.1%, outperforming the major U.S. indexes.

Much of the new case came after the reveal of Berkshire Hathaway's purchase of Taiwan Semiconductor shares, which came in a securities filing on Monday. Taiwan Semi is the largest holding in the ETF.

The fund had seen consistent outflows this year, until the purchase by Warren Buffett's investment firm. A general downturn in tech stocks, as well as geopolitical concerns about its relationship to China, have weighed on the country's stock market. The ETF is still down about 27% for the year.

— Jesse Pound

U.S.West Texas Intermediate (WTI) finished the week 9.98% lower on Friday, capping off its worst weekly stretch since April, when it lost 12.74%.

For the day, WTI settled down -1.91% at 80.08. Earlier in the session, it hit a low of 77.24, its lowest level since September.

Brent crude, meanwhile, settled down 2.41% for the day and 8.72% for the week. It marked the benchmark's worst weekly performance since Aug. 5.

Despite this week's losses, both WTI and Brent crude are in positive territory for the year, up 6.48% and 12.65%, respectively.

— Samantha Subin

Markets aren't paying adequate attention to the potential of a profits recession in the months ahead, said Richard Bernstein, chief executive officer and chief investment officer at Richard Bernstein Advisors.

A profit recession occurs when profits growth turns negative even if the overall economy holds steady, and they can occur more often than an economic recession, Bernstein told CNBC's "Power Lunch" on Friday.

"You're still seeing a lot of enthusiasm for lower-quality bonds, you're still seeing a lot of enthusiasm for more speculative stocks," he said. "... That says the market isn't really paying attention to the potential for a profits recession, which I would argue is much more important right now."

As the probability of a profits recession rises, Bernstein points investors toward stocks focused on "necessities" rather than consumers' "desires." That includes consumer staples, healthcare and companies that pay quality dividends.

"You're not hearing too many people talking about going to bars anymore, but you're hearing people talk about the importance of necessities," he said. "That's normal for this kind of environment.

— Samantha Subin

Historically, long positioning by institutional money managers takes place after the last rate hike, but it's hard ot believe all the money sitting on the sidelines is going to wait until the Fed gives the all-clear, says LPL Financial's Quincy Krosby, given the intensity of the fear of missing out by retail investors, short covering, and trader appetite.

"Bullish sentiment has been climbing higher, albeit underpinned by an extremely heavy dose of put buying as a 'just in case' positive seasonality underpinned by a statistically strong post mid-term election backdrop begins to evaporate," she said. "With markets moving so quickly and with market participants seemingly so anxious to decipher the Fed's next move, we could see this current rally gaining strength."

"The S&P 500 will climb above 4,000 and higher as soon as market participants are convinced that inflation is finally headed towards price stability, even if the Fed continues to demand more evidence," she added.

— Tanaya Macheel

Credit Suisse downgraded HP to neutral from outperform on Friday.

"We believe revenue and margins will be challenged near term by several headwinds that will more than offset management's strategy to shift to higher-margin business models (e.g., HP+) and growth opportunities," analyst Shannon Cross wrote in a note.

Those headwinds include weakening consumer sentiment, pressure on average selling prices as a result of lower demand and better supply, and slower enterprise PC and print demand.

Shares of HP are down about 22% year to date.

— Michelle Fox

Ark Invest's Cathie Wood reiterated her long-held belief that deflation is the bigger risk now than inflation.

In a tweet Friday, she said inflation will fall in line with an index from Kansas City Fed showing record low supplier delivery times. The investor believes that this period of inflation is marked by temporary supply-chain disruptions triggered by the pandemic.

— Yun Li

UBS says it's time to buy Conagra as it catches up with its rivals. Analyst Cody Ross upgraded shares to buy from neutral, saying the packaged food company is signaling a better earnings growth trajectory ahead.

"We believe CAG is in the early innings of a positive estimate revision cycle driven by: (1) strong momentum in the Nielsen scanner data YTD, (2) is one of the few companies in our coverage that is growing both vol share and HH penetration suggesting the health of its portfolio is improving, and (3) increasing B/S optionality that should provide additional levers to grow EPS at a 6% CAGR over the next three yrs (vs Street's 5% estimate)," Ross wrote in a Friday note.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Recent U.S. economic data shows inflation has finally peaked, accoriding to Ned Davis Research's Thomas Bruce.

The latest reading on the U.S. consumer price index showed a year-over-year increase of 7.7%, below a Dow Jones estimate of 7.9%.The CPI also came in below expectations month over month.

Given this data, "we believe inflation has peaked and our base case is for the Fed to reduce their pace of rate hikes to 50 basis points in December," Bruce, a research analyst at the firm, wrote earlier this week. "With favorable seasonality, technicals, and market sentiment, there's just cause for optimism, despite an investment landscape still rife with macroeconomic concerns."

— Fred Imbert, Michael Bloom

Investors have responded to each new piece of economic data or any language in recent weeks that could indicate what the Fed will do next with interest rates.

Shelby McFaddin, investment analyst at Motley Fool Asset Management, said the comments on inflation led investors to believe the Fed does not think the economy has cooled enough.

"There's absolutely been a thirst for relief and a tug of war," she said of investor response over recent days. "But at the end of the day, it really just depends on this inflationary period becoming deflationary slower than it ramped up, and on what the Fed decides to do next."

—Alex Harring

These companies are making headlines in midday trading.

• Ross Stores — Ross Stores jumped 10% after a quarterly beat on earnings and revenue. The company was also named by Credit Suisse as its top pick in the off-price retail sector.
• Foot Locker — Shares jumped 7% after Foot Locker surpassed expectations in its latest quarterly report and raised its full-year forecast.
• Carvana — Carvana dropped 6% after an internal message obtained by CNBC's Scott Wapner said the company plans to lay off about 1,500 employees, or 8% of its workforce.

Check out the full list here.

— Sarah Min

Citi U.S. equity strategist Scott Chronert is coining next year's mild recession a "consumer-led recession" because it will fall on the consumer sector, he told CNBC Friday.

Yet while Wall Street's earnings expectations are too high and will need to come down, there is some good news, he said on CNBC's "Squawk on the Street."

"We think we can navigate a recession next year with lesser earnings degradation than would typically be the case," Chronert said.

There are certain sectors that will stand out in this environment, including technology, he added. Tech's inherent growth will become somewhat defensive as next year unfolds and earnings will become more resilient.

"At the same time, we get to a point where we are looking at lesser Fed rate overhang on valuations, we think the tech sector is poised for a revaluation higher," he said.

There are also several mega cap stocks, particularly in the consumer discretionary sector, that are programmed for stronger earnings next year, Chronert said. He also believes the financial sector will show fairly resilient earnings growth next year.

— Michelle Fox

About 95% of S&P 500 companies have reported third-quarter results, and most have beaten analyst expectations.

Of the more than 470 names that have released their numbers, 70% have posted better-than-expected earnings, FactSet data shows. As far as the top line is concerned, 68% of companies have topped estimates.

Retailers have dominated the earnings calendar this week, with names such as Walmart, Ross Stores and Gap all beating bottom-line estimates.

— Fred Imbert

It's been a miserable year for those entering 2022 holding stocks and bonds, but there's one silver lining investors can wrap themselves in: Dividend payouts are at all time highs, up 6.7% in the third quarter to a record $146.2 billion in the U.S. and higher by 7% globally, to $415.9 billion.

That's the conclusion of money manager Janus Henderson, which draws its numbers from its in-house Janus Henderson Global Dividend Index of 1,200 stocks.

Domestically, investors can thank financials, which accounted for almost 40% of the growth in dividends, the largest single contribution by industry group. Internationally, oil companies and their record profits accounted for a large measure of dividend growth. Excluding the effect of the strong dollar, international dividend growth was even stronger in the third quarter, expanding by 10%.

Janus said the majority of international oil dividends were made via special payouts rather than increases in regular quarterly or semi-annual dividends. They were especially strong in emerging markets and Asia and North America, with Brazil's Petrobras (PBR) making the biggest increase.

Janus, which runs $275 billion in assets, upgraded its dividend outlook as a result of the third quarter. It now forecasts global dividends of $1.56 trillion, up an underlying 8.9% year-over-year, vs a $1.53 trillion estimate previously. In mid-August, Janus forecast underlying dividend growth at 8.5%. The long-term dividend growth average is 5%-6%.

The underlying estimate adjusts for one-time special dividends, exchange rates, payment dates and companies entering or leaving Janus's index.

— Scott Schnipper

Bank of America downgraded shares of Coinbase to neutral from buy, saying the collapse of FTX raises "contagion risk" for the cryptocurrency platform, even if it does not "another FTX."

"We think Coinbase (COIN) likely faces a number of new headwinds over the near/medium-term due to the recent collapse of rival crypto exchange FTX," analyst Jason Kupferberg wrote in a Friday note.

"We feel confident that COIN is not 'another FTX' (only $15M of deposits on FTX platform per a Coinbase blog post and $5B of cash on hand as of 9/30), but that does not make them immune from the broader fallout within the crypto ecosystem," Kupferberg added.

CNBC Pro subscribers can read the full story here.

— Sarah Min

Bitcoin is holding up this week, up marginally Friday even as the FTX saga that's wreaked havoc across the cryptocurrency market continues to unfold.

The chaos began last week as crypto exchange FTX tumbled from its $32 billion valuation and filed for bankruptcy protection, spiraling into a liquidity crisis as customers sought withdrawals and rival exchange Binance walked away from its plan to acquire the exchange.

Cryptocurrencies tumbled last week as investors grappled with the fallout from the blow-up and its implications for the market.

Earlier this week former FTX CEO Sam Bankman-Fried, who stepped down from the company last week, admitted in a tweet Wednesday that the exchange miscalculated its leverage and got "overconfident and careless" as it grew in prominence.

Bitcoin last traded at $16,682.4 and is up 0.3% for the week, according to Coin Metrics.

— Samantha Subin

Oil fell by more than $3 a barrel Friday, on track for a second straight losing week. The market was pressured by concern about weakening demand in China and further increases to interest rates.

Brent crude was down $3.56, or nearly 4%, at $86.16 a barrel, after touching its lowest since Sept. 28 at $85.80. U.S. West Texas Intermediate crude was down $3.67, or 4.5%, at $77.97.

— Yun Li

A set of forward-looking economic data is pointing more intensely toward a recession, The Conference Board reported Friday.

The board's Leading Economic Index fell 0.8% in October, bringing its cumulative six-month decline to 3.2%, after rising 0.5% in the previous half-year.

"The US LEI fell for an eighth consecutive month, suggesting the economy is possibly in a recession," said Ataman Ozyildirim, senior director of economics at The Conference Board. "The downturn in the LEI reflects consumers' worsening outlook amid high inflation and rising interest rates, as well as declining prospects for housing construction and manufacturing."

According to the board's projections, the economy is likely to drift into recession by the end of this year, with the downturn lasting into the middle part of 2023.

The index uses 10 metrics, including manufacturing hours worked, jobless claims, building permits, stock market indexes and credit spreads, to look at future conditions. Jobless claims have edged higher over the past several months, while building permits have sunk and credit spreads remain wide.

Some economists worry about the signal that the LEI is sending, particularly considering the Federal Reserve's ongoing effort to tame inflation by raising interest rates. Historically, the central bank has loosened policy during times of economic stress, but that isn't the case this time.

—Jeff Cox

Higher interest rates and surging inflation kept buyers on the sidelines in October, with home sales declining for the ninth straight month, according to the National Association of Realtors.

Sales of previously owned homes fell 5.9% from September to October. That's the slowest pace since December 2021, with the exception of a brief drop early in the Covid-19 pandemic. Home sales were 28.4% lower year over year. Supply, however, remains stubbornly low.

Mortgage rates are now 6.65%, double the record lows seen at the start of 2022, according to Mortgage News Daily.

— Michelle Fox, Diana Olick

Several discount retailers and insurance companies notched all-time highs on Friday morning.

• Paccar Inc (PCAR): $104.97.
• TJX Companies Inc (TJX):  $79.65.
• Aflac Inc (AFL): $71.71.
• Quanta Services Inc (PWR): $150.40.
• MetLife Inc (MET): $76.17.

— Chris Hayes, Tanaya Macheel

The S&P 500 is up about 10% since the end of September as valuations are trading higher than the five-, 10- and 15-year averages, according to Liz Young, chief investment strategist at SoFi. If this turns out to be a bull market rally it could be a "really powerful one," but another pullback could be on the way, she said.

"It just doesn't feel right for the S&P to be trading at that level in a time when we're really just starting to hear about earnings contractions and layoffs," Young told CNBC's "Squawk Box" Friday morning. "I would expect that we probably give some of that back, but the good news is if we do have another pullback in the market, I think it's the last one."

"We've now seen a lot of the economic data start to crack and when you think about the timing of how things usually work, the market typically falls before the economy really bottoms," she added. "What we need to see is that economic data come down enough that the Fed gets comfortable with the idea that inflation will actually be taken care of."

— Tanaya Macheel

Stocks opened higher on Friday as investors continued evaluating earnings reports and tougher language from Federal Reserve speakers.

The Dow Jones Industrial Average jumped 244 points, or 0.7%. The S&P 500 climbed 0.8% and the Nasdaq Composite advanced 1%.

— Tanaya Macheel

Boston Federal Reserve President Susan Collins expressed confidence Friday that policymakers can tame inflation without doing too much damage to employment.

"By raising rates, we are aiming to slow the economy and bring labor demand into better balance with supply," Collins said in prepared remarks for a Boston Fed conference on the labor market. "The intent is not a significant downturn. But restoring price stability remains the current imperative and it is clear that there is more work to do."

— Jeff Cox

Retail names ticked higher in the premarket Friday as more earrings point to a strong consumer. The SPDR S&P Retail ETF (XRT) was up 0.3% in early trading, trying for its third positive session in four.

XRT is down for the week but up 2.8% for the month of November and on pace for back to back monthly gains.

Elsewhere in retail, Foot Locker popped 15% in the premarket after earnings came in higher than expected and improving outlook. Ross Stores was up nearly 17% after its quarterly results came in above expectations on the top and bottom lines. Gap gained 8%.

Amazon.com rose 1.3% premarket after Goldman names it a "top holiday pick."

— Nicholas Wells, Tanaya Macheel

These are some of the stocks making the biggest moves in early morning trading:

• Foot Locker — Foot Locker shares soared 14% in the premarket after the apparel and footwear retailer beat top and bottom line estimates for its latest quarter, raised its full-year forecast and reported an unexpected rise in comparable store sales.
• JD.com — The China-based e-commerce company reported better than expected quarterly results, as the COVID-related lockdowns in China prompted more consumers to shop online.  JD.com shares jumped 5.2% in premarket trading.
• Applied Materials — Applied Materials beat top and bottom line estimates for its latest quarter, and the maker of semiconductor manufacturing equipment also issued upbeat current quarter guidance.  Shares gained 4.4% in the premarket.

Get the full list of premarket movers here.

— Peter Schacknow, Tanaya Macheel

JPMorgan analyst Lisa Gill upgraded Walgreens to overweight from neutral, citing optimism around the company's shift toward a larger health care operation.

"The company has significantly invested in its transformational consumer-centric healthcare strategy, the centerpiece of which is the launch of Walgreens Healthcare, which looks to provide a better experience for customers, improve outcomes and lower overall healthcare costs," Gill wrote in a Friday note.

CNBC Pro readers can get the full story here.

— Sarah Min

The major U.S. stock benchmarks entered Friday's session on pace for weekly losses. The Dow was down 0.6% this week, while the S&P 500 and Nasdaq Composite had each lost more than 1%. Those would mark the second weekly declines for the major averages in three weeks.

— Fred Imbert

European markets were modestly higher on Friday as investors continue to assess the trajectory of monetary policy after some tough statements from U.S. Federal Reserve officials.

The pan-European Stoxx 600 was up 0.4% in early trade, with utilities climbing 1.4% to lead gains as most sectors advanced. Tech stocks fell 0.6%.

- Elliot Smith

St. Louis Federal Reserve President James Bullard's language Thursday hurt sentiment among investors hoping to see the central bank pull back on interest rate hikes.

He said the Fed still has a work to do before inflation is under control while delivering remarks focused on the importance of using rules-based approaches when making policy. He is a voting member of the Federal Open Market Committee, which sets rates.

"Thus far, the change in the monetary policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023," he said.

— Jeff Cox, Alex Harring

These are some of the stocks making the biggest moves after hours:

Gap – The retailer jumped10% after beating Wall Street's estimates for revenue while giving a cautious outlook for the holiday season.

Palo Alto Networks – Shares of the cybersecurity provider added 6.5% after beating expectations for revenue and per-share earnings, according to Refinitiv.

Ross Stores – Shares shot up 15% following the discount retailer's report of beats on per-share earnings and revenue for the latest quarter.

Live Nation – The Ticketmaster parent gained nearly 3% following Ticketmaster's announcement that it would not hold its previously scheduled general sale of tickets for Taylor Swift's "Eras" tour on Friday. The announcement followed fans' rebukes over site malfunctions and long waits during the pre-sale. Meanwhile, public officials to break up the duo because of anti-trust concerns.

See the full list here.

— Alex Harring

Stock futures were in the green at the start of after-hour trading.

Futures tied to the Dow added 20 points, or 0.1%.

Nasdaq 100 and S&P 500 futures gained 0.4% and 0.2%, respectively.

— Alex Harring