Stock market performance/ S&P 500/ Wall Street winning streak/ Netflix stock jump/ CVS Health profit drop/ U.S. economy growth/ interest rates Federal Reserve/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ Wall Street approached its longest weekly winning streak of 2024, with mixed performances from stocks like Netflix and CVS Health. The S&P 500 edged up 0.1%, nearing its record, while the Dow Jones slipped by 169 points. Optimism about U.S. economic growth remains strong despite concerns over stock valuations and mixed corporate earnings.
Wall Street Market Trends Quick Looks
- S&P 500 Performance: Slight increase, nearing its all-time high.
- Stock Movers: Netflix surged 8.6% after strong earnings; CVS dropped 6.7% due to disappointing profit forecasts.
- Oil Prices: Brent crude fell below $74 amid reduced concerns over potential disruptions from Iran.
- Economic Optimism: Despite mixed corporate results, solid U.S. economic data fuels hopes of continued growth.
- Interest Rates: Traders expect a smaller Federal Reserve rate cut in November.
Wall Street Nears Longest Winning Streak of 2024
Deep Look
U.S. stocks continued their upward trajectory on Friday, putting Wall Street on the verge of its longest weekly winning streak of 2024. The S&P 500, which rose 0.1% in early trading, is nearing its all-time high, bolstered by corporate earnings reports. The Dow Jones Industrial Average, on the other hand, dipped by 169 points, or 0.4%, following a record-setting performance the day before. Meanwhile, the tech-heavy Nasdaq composite climbed 0.5%, showing strength driven by major tech stocks.
One of the day’s biggest movers was Netflix, which jumped 8.6% after reporting better-than-expected quarterly profits. Despite slower subscriber growth, the streaming giant’s earnings exceeded analysts’ forecasts, helping lift investor sentiment. Conversely, CVS Health faced a 6.7% drop in its stock price after warning that its quarterly profits would fall short of expectations. The company also announced a leadership change, with David Joyner set to take over as president and CEO, replacing Karen Lynch.
Wall Street’s calm trading environment reflects confidence that the U.S. economy can continue to grow, potentially avoiding a recession that had once seemed inevitable. This optimism has been fueled by strong economic data and expectations that the Federal Reserve will keep interest rates steady after recent cuts. The central bank’s actions, aimed at curbing inflation, have reassured many investors that stocks can rise further in the near term.
However, some analysts caution that stock prices might be overvalued, especially given the disparity between rising stock values and slower corporate profit growth. American Express, for example, reported better-than-expected profits for the latest quarter but saw its stock fall by 4.8% after it warned that full-year revenue might be at the lower end of forecasts.
In the energy sector, oil prices continued to decline, with Brent crude dropping 1.2% to below $74 per barrel. This marked a 6.9% decline for the week, driven by easing concerns that Israel might retaliate against Iran’s oil facilities, which could have disrupted global oil supplies. Additionally, worries over China’s slowing economic growth have weighed on demand for crude oil.
Intuitive Surgical was among Friday’s top gainers, with its stock climbing 6.8% after the company reported stronger-than-expected profits. The maker of robotic-assisted surgical systems also surpassed revenue expectations, further bolstering market sentiment.
On the bond market, Treasury yields saw a slight decrease, with the 10-year Treasury yield falling to 4.06% from 4.10% the previous day. The bond market’s movements reflect growing consensus that the Federal Reserve will likely opt for a smaller interest rate cut of a quarter percentage point at its next meeting, instead of the larger half-point cut some had anticipated earlier.
Internationally, Chinese stocks surged on reports that the country’s economic growth had slowed over the summer, raising hopes that the Chinese government and central bank might roll out additional stimulus measures. The Shanghai index rose 2.9%, while Hong Kong’s index gained 3.6%. Despite these gains, doubts remain about the effectiveness of further economic intervention.
Looking ahead, investors will keep a close watch on corporate earnings reports and economic indicators as Wall Street inches closer to completing its sixth consecutive winning week.
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