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S&P 500, Dow hold steady near record as stocks head for profitable week

By: Izer

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U.S. stocks were steady on Friday, even as the euphoria over interest rate cuts faded, as FedEx (FDX) earnings provided a reality check.

The S&P 500 (^GSPC) was flat after the benchmark index closed at an all-time high on Thursday. The Dow Jones Industrial Average (^DJI) was slightly higher after posting a record close. The tech-heavy Nasdaq Composite (^IXIC) was little changed, erasing morning losses.

Despite Friday’s muted moves, the major averages were on track to end the week in the green, with most of the gains coming from Thursday’s stock rally as investors embraced Federal Reserve Chairman Jerome Powell’s message that the Fed cut interest rates aggressively to support the economy, not save it – a notion reinforced by the jobless claims data.

But the massive rally was halted Friday amid reminders that risks to growth may remain. Wall Street is still wondering whether the Fed is too late to keep the economy on track for a “soft landing.” Traders are pricing in deeper cuts this year than policymakers had projected, according to Fed funds futures.

Read more: What the Fed’s rate cut means for bank accounts, CDs, loans, and credit cards

The Fed-fueled bullish sentiment also increases the risk of a bubble, according to Bank of America’s senior strategist. Michael Hartnett said stock prices are currently driven by policy easing and earnings growth, which is what’s driving investors to chase gains.

With less than an hour to go in trading, Intel (INTC) shares rose after the Wall Street Journal reported Reported In recent days, semiconductor giant Qualcomm Inc. has approached the chipmaker about a possible acquisition. Shares of Qualcomm (QCOM) fell 4%.

FedEx Corp. reported a sharp drop in earnings, missing Wall Street estimates. Shares of the delivery company, a bellwether for the economy, fell 14%.

Elsewhere, Nike (NKE) shares jumped after the sportswear maker named a new CEO at a time when its sales are under pressure.

He lives13 updates

  • Intel shares rise after report Qualcomm contacts chipmaker about takeover

    Intel (INTC) shares jumped more than 7% Friday afternoon after the Wall Street Journal reported Reported Semiconductor giant Qualcomm Inc. (QCOM) has approached the chipmaker in recent days about a possible acquisition, news reports said.

    Qualcomm shares fell 4% after the headline.

  • Former Snap Design Engineer on New Spectacles: ‘They’re Clearly Bad’

    Yahoo Finance’s Laura Bratton says in her report:

    A former Snap employee thinks its augmented reality glasses are “bad.”

    Sterling Crispin, an engineer who worked on the glasses in the past, criticized the product in a post on X, formerly known as Twitter, this week.

    “I’ve been working on these glasses for about a year at Snap, and I have a million negative things to say about the experience and the device,” Crispin wrote of Snap’s AR Spectacles, “but I think the product speaks for itself and it’s clearly bad.”

    Read more here.

  • Fed maverick Bowman favors lower rate cuts because ‘we haven’t met our inflation target yet’

    Yahoo Finance’s Jennifer Schoenberger says in her report:

    The lone opponent of the Fed’s massive rate cut said a “smaller first step in this process would have been preferable” because inflation has not yet fallen to the central bank’s 2% target.

    “I see a risk that the committee’s broader policy action could be interpreted as a premature declaration of victory on our price stability mandate,” Fed Governor Michelle Bowman said in a statement on Friday.

    “We have not yet achieved our inflation target.”

    Read more here.

  • Lennar CEO believes Fed rate cuts will boost confidence in housing market

    Lennar (LEN) CEO Stuart Miller believes lower interest rates and easing inflation will boost confidence in the sluggish housing market after the U.S. Federal Reserve cut interest rates by 50 basis points.

    “Lower prices and controlled inflation will build affordability, enabling more families to either access homeownership for the first time or buy to upgrade,” Miller said on the company’s third-quarter earnings call.

    His comments came after Lennar on Thursday. Quarterly home applications reported Gross profit margins on home sales fell short of analysts’ expectations for the fiscal third quarter ended Aug. 31. Lennar shares fell 4% on Friday after the news. The SPDR S&P Homebuilders ETF (XHB) fell 1%.

    The combination of high mortgage rates and home prices over the past few years has dampened buyers’ appetite for trying to buy a home. Mortgage rates peaked at about 7% earlier this year but are now much lower. The average rate on a 30-year fixed-rate mortgage fell about a tenth of a percentage point to 6.09% on Thursday from 6.2% a week earlier, according to Freddie Mac.

    Meanwhile, the Federal Reserve cut interest rates this week and has indicated it will cut rates twice more this year.

    “While strong demand enabled by stimulus and lower mortgage rates has driven the new home market over the past two years, we fully expect a stronger and broader demand cycle as prices decline,” the executive added.

  • Why are big retailers experimenting with smaller format stores?

    From Edwin Roman of Yahoo Finance:

    Target (TGT), Ulta Beauty (ULTA), and Macy’s (M), among many others, are shifting more toward focusing on smaller-format stores.

    Small-format stores are miniaturized versions of large retail stores that offer consumers an efficient, convenient, and localized shopping experience. There are several reasons why retailers are looking to small-format store strategies, according to RJ Hottovy, head of analytics research at Placer.ai.

    Read more here.

  • Dow turns positive as stocks hover near record highs

    The Dow Jones Industrial Average (^DJI) rose into the green Friday afternoon, hovering near record highs.

    Major averages opened slightly lower Friday morning after the S&P 500 (^GSPC) and Dow Jones hit all-time highs.

    By around 1 p.m. ET, stocks had pared some of their morning losses. However, the S&P 500 and the tech-dominated Nasdaq Composite (^IXIC) remained in the red.

  • Apple iPhone 16 and iPhone 16 Pro review: Camera control and bigger screens, Apple’s intelligence is not ready yet

    Dan Hawley of Yahoo Finance says:

    Apple (AAPL) will launch the iPhone 16 and iPhone 16 Pro on September 20, and they come with a number of updates that are worth upgrading to if you’re using an older iPhone. There’s a new camera button, improved camera performance, larger displays on the Pro models, and better battery life overall.

    I’ve spent some time with both the iPhone 16, which starts at $799, and the iPhone 16 Pro, which starts at $999. If you’ve had an older iPhone, you’ll appreciate the improvements Apple has made to the new phones. But the biggest upgrade in Apple’s latest iPhones is the company’s Apple Intelligence platform.

    Read more here.

  • Trump Media Shares Drop After Lockdown Ends

    Trump Media & Technology Group (DJT) stock fell to fresh lows on Friday after the company’s six-month ban expired.

    Starting Thursday, former President Donald Trump and other shareholders were allowed to sell their shares in the social media company for the first time since it went public in March.

    Trump, who owns more than half of the company, recently said he would not sell his shares.

    “I have absolutely no intention of selling,” Trump told reporters at a news conference last week. “I love it. I use it as a way to get my point across.”

    The stock has been volatile, often moving in tandem with any development related to the Republican presidential candidate. On Friday, shares fell 5%.

  • Utilities Outperform as Rest of Markets Decline

    The utilities sector (XLU) rose 1.5% while the rest of the sectors were flat or lower during Friday’s market action.

    Technology shares (XLK) fell 0.9% after leading the market higher in the previous session.

    The S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) retreated from their record highs on Friday.

    Utilities outperformed others on Friday.Utilities outperformed others on Friday.

    Utilities outperformed others on Friday.

  • Trump Continues to Attack Fed Over Rate Cut: ‘It Was a Political Move’

    Yahoo Finance’s Jennifer Schoenberger says in her report:

    Republican presidential candidate Donald Trump has not backed down from his criticism of the Federal Reserve after it cut interest rates by a half percentage point less than two months before the November election.

    “It’s really a political move,” the former president said Thursday during an interview with Newsmax.

    Read more here.

  • Constellation Energy shares hit all-time high after reaching deal to sell nuclear power to Microsoft

    Shares of Constellation Energy (CEG) surged to an all-time high on Friday after the company announced plans to restart a nuclear reactor at Three Mile Island (TMI) and sell power to Microsoft (MSFT) for its data centers.

    Wall Street had expected Constellation to sign a deal this year with a major tech player as they seek more power to power their tech infrastructure amid the artificial intelligence boom.

    Constellation purchased the Unit 1 reactor at TMI, located in Pennsylvania, in 1999. The reactor is located next to Unit 2, a reactor that was shut down after a partial meltdown in 1979.

    “3MI Unit 1 is a fully independent facility, and its long-term operation was not affected by the Unit 2 incident,” Constellation said in its announcement on Friday.

    Before the first unit was shut down for economic reasons in 2019, the plant had a generating capacity of 837 megawatts, enough to power more than 800,000 average homes, according to the company.

    Constellation Energy shares rose 15% on Friday. The stock is up more than 100% year to date.

  • Nike shares rise 7% after CEO change

    Nike Inc. (NKE) shares surged Friday after the sneaker giant announced that CEO John Donahoe plans to retire. He will be replaced by Elliot Hill, the company’s former president of consumer and marketplace, effective Oct. 14.

    Wall Street analysts welcomed the return of Hill, who left Nike in 2020. The company’s shares rose more than 7% in early trading.

    As Yahoo Finance’s Brooke DePalma reports, the leadership change comes at a time when Nike’s board — which includes founder Phil Knight, former CEO Mark Parker and Apple CEO Tim Cook — sees fit to focus on improving the product and reestablishing relationships that Donahoe tossed aside, such as the one with Foot Locker (Florida).

    Read more here.

  • Stocks retreat from record highs as Fed rate cut wave fades

    Stocks were slightly lower in early trading Friday, retreating from record highs hit by the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI).

    The tech-heavy Nasdaq Composite (^IXIC) also fell after a massive rally in the previous session following a major interest rate cut by the Federal Reserve.

    The market’s euphoria faded on Friday after delivery giant FedEx (FDX), a bellwether for the U.S. economy, reported disappointing quarterly results late Thursday.

    FedEx shares fell in early trading.

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