Stocks fall on Friday, but S&P 500 notches winning week as strong 2023 continues

Stocks closed lower Friday, but ended a winning week.

The S&P 500 declined 1.04% to 4,136.48. The Nasdaq Composite shed roughly 1.59% to 12,006.95. Meanwhile, the Dow Jones Industrial Average slipped 127.93 points, or 0.38%, to 33,926.01.

— Sarah Min

Jenny Harrington, CEO at Gilman Hill Asset Management, is selling shares of Chevron and snapping up shares of Pioneer Natural Resources as part of her strategy focusing on dividend yields.

Harrington said on CNBC's "Halftime Report" that although Chevron has been improving its performance, its dividend yield has declined below her portfolio's dividend income yield target of 5% or greater. The energy stock is paying a 3.6% dividend yield, while Pioneer has a yield of 11.8%, according to FactSet.

Joe Terranova, senior managing director for Virtus Investment Partners, who stated that he personally owns Pioneer shares, praised Harrington's tactic.

"That's a great strategy," he said. "That's exactly what investors should be considering right now."

CNBC Pro subscribers can read more about Harrington's play here.

— Hakyung Kim

The S&P 500 and Nasdaq Composite are headed for fresh weekly gains, but they haven't come without their fair share of volatility.

Both major indexes rallied earlier in the week after Federal Reserve's latest interest rate announcement sparked hope that the central bank would soon loosen up on its fight against inflation. However, they gave back a chunk of those gains Friday, after a stunningly strong jobs market report worried investors the Fed would keep hiking rates. Disappointing earnings reports from several major technology companies also weighed on the market.

Still, the S&P 500 was up more than 1% for the week as of early afternoon ET. That would be its fourth weekly gain in five weeks. The Nasdaq was up 3.6%, on pace for a five-week winning streak.

We used data from FactSet to take a look at some of the biggest gainers this week, and where analysts see them going forward.

CNBC Pro subscribers can read more about this week's top outperformers here.

— Hakyung Kim

The S&P 500 traded at session lows heading into the final hour of trading Friday.

The broader market index was down more than 1.2%, while the Nasdaq Composite was off by more than 1.7%. Meanwhile, the Dow Jones Industrial Average was off by more than 220 points, or 0.65%.

Still, the S&P 500 and Nasdaq are set for weekly gains. The Dow is on pace to close lower.

— Sarah Min

Stocks may have a stronger-than-expected start to 2023, but it may be too soon for investors to search for a new narrative, according to Morgan Stanley's Mike Wilson.

"While there have been several positive developments, we think the good news is now priced, and reality is likely to return," Wilson wrote Friday.

— Sarah Min

Amazon shares dropped more than 7.8% during afternoon trading, heading for their worst day since April. The online retailer issued lackluster guidance, even as it reported a beat on fourth-quarter revenue.

— Sarah Min

Apple was the top performer in the Dow Jones Industrial Average. The tech stock jumped 3.2%, reversing earlier losses after missing estimates on the top and bottom lines in its most recent quarterly report.

That helped the Dow outperform the other benchmarks slightly, climbing 0.2% during midday trading Friday.

— Sarah Min

Check out the companies making headlines in midday trading.

• Amazon – The e-commerce giant's stock tumbled 4% despite a revenue beat. Late Thursday, Amazon issued weaker-than-expected guidance for the current period. The company also reported a slowdown in growth within its cloud business.
• Nordstrom — The retailer surged 20% after The Wall Street Journal reported activist investor Ryan Cohen is building a stake and will push for changes in the board, citing people familiar with the matter.
• Clorox – Shares of Clorox rose 7% after the cleaning products company posted an earnings beat. The company made $0.98 per adjusted share on revenue of $1.72 billion where Wall Street expected adjusted earnings per share of $0.65 and $1.66 billion in revenue, per Refinitiv.

Read the full list here.

— Alex Harring

The Federal Reserve is even more likely to raise interest rates to its forecast 5.25% for the top end of its fed funds target rate range, after January's employment report showed a boom in new jobs.

There were 517,000 jobs added in January, well above the Dow Jones consensus of 187,000.

"For the Fed, it means they've got to be worried about a reacceleration in inflation. Even though wages are decelerating in this measure, aggregate demand is too strong. These are paychecks. Some of them multiple," said Diane Swonk, KPMG chief economist. "We still have a lot more data before we get to March. For now, it's a quarter point [hike]. They are not going to move off 5.25%. I can tell you that right now."

In the futures market, traders were betting on an end rate, or terminal rate near 5%. According to rate strategist Ben Jeffery at BMO, the fed funds futures showed a high 4.97% by June, up from 4.89% Thursday.

The market is pricing in a 25 basis point hike for March. A basis point equals 0.01 of a percentage point.

But Jeffery said the futures market is now pricing in more of a chance for a quarter point hike in May as well. "There was always a solid probability for 25 basis points in May to be the last hike, and this has increased the probability of that," he said.

— Patti Domm

The broader stock market struggled Friday, but shares of Liberty Media Formula One bucked the negative trend.

Formula One shares rose 0.3% to hit a record high going back to April 2016. The stock has also had a monster start to the year, rallying more than 20%.

The global car racing series has gained popularity in recent years, especially in the U.S. In 2023, there will be three races in the U.S.

— Fred Imbert, Chris Hayes

The S&P 500 has flashed one particular type of rare, bullish signal seen by technical analysts as an indicator that a big rally could be on the way.

On Thursday, the broad market index formed what Wall Street calls a "golden cross," which happens when a 50-day moving average crosses through and above the 200-day moving average. Moving averages are simply the average of the last 50-, or 200, closing prices.

Traders and analysts use the golden cross as an indicator that a market trend is about to turn more positive. The opposite, the so-called death cross, would indicate a bearish change.

For more on what this means for the market and what investors should expect next, read the full story on CNBC Pro.

— Tanaya Macheel

Today's jobs report revealed that the labor market is still going strong, even amid rate hikes from the Federal Reserve to tame high inflation by slowing down the economy.

"The burning question remains: how long can this strength endure?" said Nick Bunker of Indeed Hiring Labs in a Friday note.

"Some data from recent jobs reports had raised concerns as potential leading indicators of the labor market were starting to blink yellow. Those signals flashed green in January as weekly hours rose and employment at temporary help service firms increased," he said. "While we don't want to make too much of one report, the cessation of those troubling signs is heartening and suggests the strong jobs gains won't fade too quickly."

He added that the report is "kindling on the raging debate about how the Federal Reserve should think of the relationship between the labor market and inflation."

"If the central bank thinks that the low unemployment rate will necessarily push up wage growth and inflation moving forward, this strong report may darken the economic outlook," he said. "But if instead, Chair Powell and colleagues are heartened by tempering wage growth, then the odds that the economy can avoid a recession increase."

In addition, the prospects that the U.S. economy will fall into a recession this year are pushed off by each new batch of labor data.

—Carmen Reinicke

A strong January jobs reports adds further support to the Federal Reserve's rapid tightening pace, said Jack McIntyre, portfolio manager at Brandywine Global.

"In a year when the economic data is more important than the Fed, the January employment report clearly justified the Fed having tightened by 425 bps over the past 10 months," he said.

Still, the labor is a lagging indicator, making it one of the last areas likely to show weakness, he noted.

"The Fed knows this and won't accelerate their pace of tightening due to this report," McIntyre said. "A further tightening in March of 2023 won't impact the US economy until well into 2024."

— Samantha Subin

Stocks opened lower Friday as investors digested a hot January jobs report, as well as some earnings misses.

Dow Jones Industrial Average dropped 109 points, or about 0.4%. The S&P 500 lost 1.1%, while the Nasdaq Composite fell 1.8%.

— Sarah Min

Deutsche Bank downgraded shares of Ford Motor to a sell from a hold rating after the automaker's ugly fourth-quarter print.

According to analyst Emmanuel Rosner, this, and an "aggressive" 2023 outlook, "showcase considerable operational shortfalls and suggest meaningful downside risk to earnings trajectory," he said in a Friday note.

Ford's earnings for the period fell short of both Wall Street and its own forecast as it dealt with execution issues that hindered operations.

Shares shed more than 8% before the bell.

Read more on the downgrade from Deutsche Bank here.

— Samantha Subin

The U.S. economy added 517,000 jobs in January, the Labor Department said Friday. That number easily topped a Dow Jones consensus forecast of 187,000.

— Jeff Cox

Alphabet — Shares declined more than 3% after Google-parent Alphabet missed analyst expectations in its latest earnings report. Alphabet earned $1.05 per share, lower than the expected earnings of $1.18 per share, according to consensus estimates from Refinitiv. It posted revenue of $76.05 billion, less than the forecasted $76.53 billion.

Apple — The tech giant saw its stock fall about 2% in premarket after the company missed expectations for revenue, profit, and sales for many of its lines of business. Apple's overall sales for the holiday quarter fell 5% year over year, marking the company's first top-line decline since 2019.

Amazon — Amazon dropped 4% after the e-commerce giant reported its fourth-quarter results. Although the company's quarterly sales beat analysts' estimates, current-quarter guidance came in somewhat light of expectations. The e-retailer estimates its first-quarter revenue to fall between $121 billion and $126 billion. Meanwhile, analysts were expecting sales to come in at $125.1 billion, according to Refinitiv.

CNBC Pro subscribers can click here to read more about the biggest movers premarket.

— Hakyung Kim

Apple reported quarterly results that missed analyst expectations, but analysts aren't bailing on the stock just yet.

"Despite near-term macro and supply headwinds, the Apple flywheel keeps spinning," said Morgan Stanley's Erik Woodring, who retained his price target and overweight rating.

According to Woodring, any weakness in shares post-earnings also creates an ideal buying opportunity. At the same time, he anticipates improving iPhone revenues in the March quarter.

For more analyst reaction to Apple's results, check out our story.

— Sam Subin

Shares of Nordstrom rallied 27% after The Wall Street Journal reported that activist investor Ryan Cohen is building a sizeable stake in the retailer.

The report, which cites people familiar with the matter, also said Cohen will push for changes to Nordstrom's board following a sharp stock price drop. Nordstrom shares lost 28.7% in 2022 and slid 27.5% in 2021.

Cohen is perhaps best-known for his involvement in so-called meme stocks such as Bed Bath & Beyond and GameStop.

"While the news of Cohen's stake is likely to be positive for short-term share price, we'd require additional clarity on his involvement to better determine potential long-term implications," KeyBanc analyst Noah Zatzkin said in a note.

— Fred Imbert

The decline in futures suggests that Friday's trading session could put a damper on what has been a winning week for stocks.

The Dow is the most at risk of giving up its gains, as the 30-stock average is up just 0.22% for the week.

The S&P 500 and Nasdaq Composite are 2.68% and 4.98%, respectively, for the week.

The Dow and S&P 500 are aiming for their fourth positive week in five, while the Nasdaq is on track for its fifth-straight positive week.

— Jesse Pound, Christopher Hayes

There were many major earnings reports outside of the technology space on Thursday evening. Here are some notable results:

Starbucks — The coffee chain missed estimates on the top and bottom lines for its December quarter, hurt by a slowdown in China. Shares fell more than 2% after hours.

Clorox — The cleaning products company was a bright spot in Thursday's batch of earnings, as Clorox beat estimates on the top and bottom lines for its fiscal second quarter. The company also hiked its earnings and sales forecast. Shares jumped more than 3% after the bell.

Atlassian — The software stock fell more than 13% in extended trading after the company reported an operation loss of $99.2 million for its latest quarter. Atlassian had a positive operating income of $23 million in the same quarter a year prior.

Check out more notable movers here.

— Jesse Pound

Investors will be closely watching January's nonfarm payrolls, which are due out from the U.S. Bureau of Labor Statistics at 8:30 a.m. ET Friday.

Economists anticipate that 187,000 jobs were added last month, according to Dow Jones. That's down from 223,000 in December.

Meanwhile, the unemployment rate is expected to edge higher: Economists call for a rate of 3.6% in January, up slightly from the prior month's 3.5%. Wages are expected to have grown 4.3% from the prior year, slowing down from the 4.59% pace in December.

The data will be released at a pivotal moment, with the Federal Reserve fresh off of a 0.25 percentage point rate hike earlier this week. Tech companies have also laid off tens of thousands of workers, and the trimming continues at companies like FedEx and Hasbro.

Read more about the upcoming January's payrolls report here.

— Darla Mercado, Patti Domm

Ford's adjusted fourth-quarter earnings per share of 51 cents was 11 cents below estimates, according to Refinitiv, and not even the automaker's CEO tried to spin the result in a positive light.

"We should have done much better last year," CEO Jim Farley said in an earnings release. "We left about $2 billion in profits on the table that were within our control, and we're going to correct that with improved execution and performance."

Shares of Ford were down about 6% in after hours trading.

— Jesse Pound

U.S. futures opened lower, with Nasdaq 100 futures leading to the downside with a loss of about 0.8%.

— Jesse Pound

Several high-profile tech earnings reports on Thursday delivered weaker-than-expected results, even after analysts had been dialing back their projections in recent months.

Apple and Google-parent Alphabet each missed estimates on the top and bottom lines for the quarter. Alphabet's stock slumped 3% in extended trading.

Amazon, meanwhile, beat revenue estimates but saw its earnings per share fall sharply year over year and provided light guidance.

Shares of Apple and Amazon, however, pared most of their initial losses in the extended trading session. Apple was down about 1%.

— Jesse Pound