Wall Street barely gains as traders digest earlier gains, Fed comments

By Sinéad Carew and Shristi Achar A

(Reuters) - Wall Street's three major indexes edged up slightly on Friday as investors digested recent gains while remarks from Federal Reserve officials clouded the outlook about when the U.S. central bank might start cutting interest rates.

Vice Chair for Supervision Michael Barr said he believes the Fed is at or near the peak of interest rate hikes, but San Francisco Fed chief Mary Daly and Boston Fed President Susan Collins highlighted the need for more evidence of cooling inflation.

Adding pressure, shares of Applied Materials fell 4% after its third-quarter report and news the U.S. Justice Department is investigating allegations that the semiconductor equipment maker violated export curbs to China.

Offering equities some support was a decline in the 10-year Treasury note yield, which touched a roughly two-month low during the session.

The S&P 500, the Nasdaq and the Dow registered their third straight week of gains. For the S&P and the Dow it was the longest weekly winning streak since July. For the Nasdaq it would be the longest weekly advance since June.

"The biggest catalyst for stocks today is that we hit a two month low in Treasury yields," said Robert Phipps, director at Per Stirling in Austin Texas.

While the major indexes had a muted session, Per Stirling's Phipps pointed to strength in more cyclical sectors.

"Because tech stocks are weak today the S&P 500 is hiding strength in other areas of the market," he said, pointing to gains in energy, industrial and financial sectors.

The Dow Jones Industrial Average rose 1.81 points, or 0.01%, to 34,947.28, the S&P 500 gained 5.78 points, or 0.13%, to 4,514.02 and the Nasdaq Composite added 11.81 points, or 0.08%, to 14,125.48.

For the week, the S&P 500 added 2.2% while the Nasdaq composite rose 2.4% and the Dow climbed 1.9%.

"We've come a long way. We need to digest some of these moves and look for what the next catalyst is. Earnings is behind us. The Fed is on hold and is going to be in December. The equity market is looking for guidance," said Jack McIntyre, portfolio manager at Brandywine Global in Philadelphia.

Energy, finishing up 2.1%, was the biggest percentage gainer among the 11 major S&P 500 sectors as oil prices settled up more than 4%. [O/R]

The communication services index was the biggest percentage loser as heavyweight Alphabet fell more than 1%. Technology, the second weakest sector was dragged down by Microsoft, which fell 1.7%.

ChatGPT maker OpenAI, which is backed by Microsoft, said on Friday that its Chief Executive Officer would leave after the board said he was "not consistently candid in his communications".

Countering its megacap peers, Amazon.com gained 1.6%. The online retailer announced it is trimming jobs at its Alexa voice assistant unit, citing shifting business priorities and a greater focus on generative artificial intelligence.

The small-cap Russell 2000 index rallied 1.4% on the day, outperforming broader markets. The index, whose members benefit more than larger cap companies from easing of lending rates, also outperformed for the week, adding 5.4%.

Retail stocks were in demand with Ross Stores rallying 7.2%. The company, which sells off-price clothing and home products, raised its annual earnings forecast after topping third-quarter sales and profit expectations.

Also Gap shares surged 30.6% as the apparel retailer posted better-than-expected third-quarter results due to improving sales at Old Navy and easing supply expenses.

ChargePoint Holdings shares slumped 35.5% as the electric-vehicle charging network provider lowered estimates for third-quarter revenue. It also named Rick Wilmer CEO.

On U.S. exchanges 10.05 billion shares changed hands compared with the 11.04 billion moving average for the last 20 sessions.

Advancing issues outnumbered declining ones on the NYSE by a 2.65-to-1 ratio; on Nasdaq, a 2.16-to-1 ratio favored advancers.

The S&P 500 posted 18 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 55 new highs and 97 new lows.

(Reporting by Sinéad Carew in New York, Shristi Achar A and Amruta Khandekar in Bengaluru; Editing by Maju Samuel, Pooja Desai and David Gregorio)