MARKET SNAPSHOT

U.S. stocks fell amid signs of slowing business activity and as the government investigated UnitedHealth's pricing practices. Treasury yields declined ahead of a data-heavy week that will include the Fed's preferred inflation gauge. Oil prices slipped, giving up some of the week's gains. Gold prices slipped from their record high, as the dollar strengthened.

MARKET WRAPS

EQUITIES

Stocks erased much of their gains from the week after investors tapped the brakes in response to signs of a lackluster economy.

Bond prices rallied while all three major indexes dipped by more than 1%, undoing record gains earlier in the week by the S&P 500. Indicators published in the morning showed service industry weakness and a 4.9% drop in sales of existing homes last month. A report last week showed retail sales also fell in January.

The Dow industrials and S&P 500 fell 1.7%. The Nasdaq Composite gave back 2.2%.

"The data is just piling up day after day," said Jay Hatfield, chief executive at Infrastructure Capital Advisors.

Flagging health care stocks also weighed down the Dow Jones Industrial Average. UnitedHealth stock dropped more than 7% Friday after The Wall Street Journal reported the Justice Department was probing its Medicare billing practices and how the company records diagnoses.

Earlier Friday, Chinese shares closed higher amid positive sentiment over tech stocks and Chinese AI firm DeepSeek. Alibaba's latest earnings are buoying the upbeat mood toward Chinese tech stocks and foreign investors' interest in Chinese equities.

The benchmark Shanghai Composite Index added nearly 0.9% and the Shenzhen Composite Index gained 1.6%. The ChiNext Price Index grew 2.5%. Hong Kong's Hang Seng Index jumped 4.0%.

Japan's Nikkei Stock Average rose 0.3% as concerns about borrowing costs ebbed. Auto and pharmaceutical stocks led the gains.

Stocks in Australia slipped, as the S&P/ASX 200 dropped 0.3% for its fifth consecutive day of decreases.

New Zealand's NZX-50 finished 1.0% lower, rounding out its worst week of 2025, marking a fourth consecutive decline. Financial and property stocks were notable losers.

COMMODITIES

Oil futures declined as crude continued to struggle to break out of a sideways trading pattern.

West Texas Intermediate crude for April delivery dropped 2.9% to finish at $70.40 a barrel on the New York Mercantile Exchange. April Brent crude fell 2.7% to settle at $74.43 a barrel on ICE Futures Europe.

The rangebound trading "may be due to the fact that a number of decisions are pending that could drive the oil price in one direction or the other," said Barbara Lambrecht, commodity strategist at Commerzbank.

"These include the possible postponement of the gradual increase in OPEC+ production, which is currently scheduled to begin in April, the negotiations to end the war in Ukraine, the possible tightening of U.S. sanctions against Iran, and, last but not least, U.S. President [Donald] Trump's announcement that he wants to quickly rebuild the U.S. strategic reserves," Lambrecht said.

Front-month gold futures fell in Friday's session, although gold finished the week higher.

Gold futures settled down 0.1% to $2,937.60 per troy ounce for the day, but ended the week up 1.9%.

"The biggest factor driving gold to $3,000 per ounce is massive coordinated buying by BRICS central banks," said David Miller of Catalyst Funds.

TODAY'S TOP HEADLINES

Home Sales Fell 4.9% in January, Extending Slump in Housing Market

Sales of existing homes fell in January, starting the year on a down note after two consecutive years of extremely sluggish sales.

Home prices and mortgage rates, which were a drag on home sales for most of 2024, stayed elevated last month and put off many buyers. Some who are shopping for their first home have been priced out of the market, and many homeowners have decided to stay put rather than move and give up a low mortgage rate.

U.S. existing-home sales declined 4.9% in January from the prior month to a seasonally adjusted annual rate of 4.08 million, the National Association of Realtors said Friday. Economists surveyed by The Wall Street Journal had estimated a monthly decrease of 2.6%.

U.S. Consumer Confidence Falls Back on Fears of Tariff-Induced Price Increases

U.S. consumer confidence slid backward this month, reflecting expectations that tariffs proposed by the Trump administration on goods imports will lead to rising prices.

The University of Michigan's index of consumer sentiment tumbled to 64.7 at the end of February, well below January's 71.7. It also was weaker than economists' expectations of 67.8 from a Wall Street Journal poll, which was also the February midmonth reading.

In particular, the survey's gauge for buying conditions for durable goods-those meant to last five years or more-slumped, in large part due to fears that tariff-induced price increases are imminent, survey director Joanne Hsu said.

Bank of Canada Gov. Macklem Warns of 'Severe' Fallout From Trade Row With U.S.

OTTAWA-Canada's economy is on solid footing but the breakout of a protracted trade conflict with the U.S. would have "severe" consequences and demand further rate cuts, Bank of Canada Gov. Tiff Macklem said Friday.

Macklem said aggressive rate cuts that started last June are leading to a solid pickup in household consumption and broader activity. That is being offset by President Trump's threat to impose 25% tariffs on the country's U.S.-bound nonenergy exports, and a 10% tariff on energy products entering the U.S.

Trump said those tariffs could materialize starting March 4, or a week before the next Bank of Canada rate-decision meeting, unless Canada demonstrates progress on fortifying border security, deterring fentanyl trafficking and addressing certain economic issues.

DOJ Investigates Medicare Billing Practices at UnitedHealth

The Justice Department has launched an investigation into UnitedHealth Group's Medicare billing practices in recent months, people familiar with the matter said.

The new civil fraud investigation is examining the company's practices for recording diagnoses that trigger extra payments to its Medicare Advantage plans, including at physician groups the insurance giant owns.

A series of articles in The Wall Street Journal last year showed that Medicare paid UnitedHealth billions of dollars for questionable diagnoses. Attorneys with the Justice Department as recently as Jan. 31 interviewed medical providers named in the articles.

Coinbase Says SEC Intends to Drop Lawsuit Against Crypto Exchange

Regulators have agreed to drop a lawsuit against Coinbase that sought to regulate the company as a stock exchange, marking the end of years of hard-line enforcement against the crypto market.

Coinbase said Friday that enforcers at the Securities and Exchange Commission would recommend dismissal of the two-year-old lawsuit, a crucial plank of the agency's strategy to bring crypto under investor-protection rules. The crypto exchange had fought the suit, which was filed during the Biden administration, arguing the law didn't support equating crypto assets with securities.

"It's a great day for Coinbase and for crypto," said Paul Grewal, Coinbase's chief legal officer. "We were committed to defending it [the lawsuit] to the gates of hell, for as long as it took and for as much money as it took."

Expected Major Events for Monday

02:00/NZ: Jan Credit card statistics

05:00/SIN: Jan CPI

08:20/TAI: Jan Money Supply

23:30/JPN: Dec Final Labour Survey - Earnings, Employment & Hours Worked

23:50/JPN: Jan Services Producer Price Index

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(END) Dow Jones Newswires

February 23, 2025 16:30 ET (21:30 GMT)

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