The S&P 500 and the Nasdaq closed lower on Friday as deteriorating consumer sentiment data and the Middle East conflict soured investors on riskier bets and overshadowed upbeat quarterly earnings from some of the largest US banks.

Wall Street's three major indexes opened higher but lost ground after a preliminary reading on US consumer sentiment showed a sharp fall in October. The Dow managed a small gain.

Investors were also monitoring news from the Middle East. On Friday Israel said it carried out raids inside the Gaza Strip, its first announcement of ground operations aimed at Hamas fighters after their deadly rampage in Israel. The United Nations said Israel's call for Gaza civilians to leave was impossible "without devastating humanitarian consequences."

US Treasury prices rose as investors looked for safety while the price of US crude oil settled up 5.8 percent.

"This signals more of a risk off-sentiment," said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. The moves in bonds, equities and oil reflect worries about deteriorating consumer sentiment, the global economy and geopolitical conflict, she added.

At this stage of the economic cycle when data has been good but is "expected to deteriorate over the next several months," Goodwin said, "shifts in leadership are incredibly common and no one market narrative tends to last for more than a couple of days at a time."

However, unless there is a major escalation in the Middle East war the strategist said she did not expect Friday's mood to be "indicative of the beginning of a troubled market."

The Dow Jones Industrial Average rose 0.12 percent, to 33,670, the S&P 500 lost 0.50 percent, at 4,328 and the Nasdaq Composite dropped 1.23 percent, to 13,407.

However, for the week the S&P 500 registered a 0.45 percent gain for its second weekly advance in a row. The Nasdaq fell 0.18 percent for the week. The Dow showed a 0.79 percent gain, snapping a two-week losing streak.

Shares in JPMorgan Chase, Wells Fargo and Citigroup rose after their quarterly profits trounced analysts' estimates with help from higher interest rates. Wells Fargo rose 3 percent and JPMorgan closed up 1.5 percent, but Citigroup lost steam, ending down 0.2 percent. (Reuters)
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Last updated: 2023-10-14 HKT 09:34