Tech, growth stocks help Nasdaq extend gains; defensive sectors weigh on S&P, Dow

Wall Street's major indices were mixed on Friday, with traders buying into growth stocks and moving out of defensive sectors. Investors also digested the previous day's stunning rally that was driven by softer than expected inflation data. Cryptocurrencies were in focus after beleaguered exchange FTX filed for bankruptcy. By afternoon, the Nasdaq Composite ( COMP.IND ) had risen 1.29% to 11,257.10 points, adding to its massive jump of 700 points on Thursday. Traders continued to buy into growth stocks, with megacap technology firms rising across the board. The benchmark S&P 500 ( SP500 ) was up 0.34% at 3,969.87 points. The blue-chip Dow ( DJI ) was 0.51% lower at 33,542.31 points. Both indices were weighed down by losses in defensive healthcare stocks . Of the 11 S&P sectors, seven were trading in the green, with Energy the top gainer, as crude oil prices surged after China eased some of its tough COVID-19 rules which added to hopes for a demand boost. Aside from Health Care, defensive sectors Consumer Staples and Utilities were also lower. The bond market is closed for the Veterans Day holiday following a sharp drop in Treasury yields in the previous session after monthly core CPI came in cooler than anticipated. "If we ever needed proof that the market is absolutely desperate for some good news on inflation, yesterday proved it in spades with the market moves up there with the most remarkable since the pandemic began thanks to a -0.2% miss in both headline and core inflation," Deutsche Bank's Jim Reid said. "I don't think there is anything inconsistent in saying that markets continue to be set up for a rally (technicals, seasonals, better European near-term energy outlook etc.) while also thinking next year could ultimately be pretty bad," Reid added. The inflation data spurred hopes that the Federal Reserve would slow down its aggressive rate-hike path. According to the CME FedWatch tool, markets are now pricing in a 80.6% probability of a 50-basis-point hike rather than a 75-point one at the central bank's policy meeting next month. "The lower inflation reading makes a Fed pivot more likely, but investors shouldn't assume that interest rates will be falling soon. Instead, it is very likely that interest rates will continue to climb, although likely at a somewhat slower pace. After all, inflation is still very elevated in absolute terms," Seeking Alpha contributor Jonathan Weber cautioned . In economic data on Friday, the University of Michigan's preliminary measure of November consumer sentiment came in lower than anticipated at 54.7 vs. the consensus figure of 59.5 . Inflation expectations ticked up to 5.1%. The FTX saga took another twist on Friday after the cryptocurrency exchange commenced bankruptcy proceedings and its CEO Sam Bankman-Fried stepped down. Crypto markets clawed back some losses after resuming their selloff , with Bitcoin ( BTC-USD ) down more than 1% and ethereum ( ETH-USD ) having reversed course to be up 1.2%. Among other active movers, Chinese tech stocks moved higher amid the conclusion of the Singles' Day shopping event and broader optimism as Beijing moved to relax its tough COVID-19 policies. Macau casino stocks also rose . Health and pharma stocks fell in sector-wide selling, with UnitedHealth, Merck and Johnson & Johnson the top three percentage losers on the Dow ( DJI ). Cigna and Elevance Health were the top losers on the S&P ( SP500 ). In earnings related news, software company Expensify fell on a disappointing quarterly report. Shares of electric vehicle startup Polestar drove higher after its revenue more than doubled. Pot stocks gained on the back of Aurora Cannabis' results. The third quarter earnings season largely begins to wind down next week , though reports from retail giants such as Walmart, Target and Home Depot will be closely watched for comments around the state of consumer spending and their forecasts for the all-important holiday sales quarter. "(Q3) aggregate earnings growth y/y is +2%, however this was driven largely by energy, as aggregate earnings actually fell 6% y/y ex-energy," JPMorgan's Bram Kaplan said in a research note.