U.S. stocks are hanging near their record heights Friday as Wall Street heads toward the close of its 12th winning week in the last 13. The S&P 500 was edging up by 0.1% in morning trading after setting a record high for five straight days. The Dow Jones Industrial Average was up 80 points, or 0.2%, and the Nasdaq composite was 0.1% lower.
Quick Read
- U.S. Stocks Near Record Highs: The U.S. stock market is close to its record levels, heading towards its 12th winning week in the last 13.
- S&P 500 Slight Increase: The S&P 500 edged up by 0.1%, continuing its streak of record highs for five consecutive days.
- Dow Jones and Nasdaq Movements: The Dow Jones rose by 80 points (0.2%), while the Nasdaq composite saw a slight decrease of 0.1%.
- Intel’s Decline Affects Market: Intel’s shares dropped 11.1% despite reporting higher than expected profits, due to its lower revenue and profit forecasts for early 2024.
- Visa’s Drop Despite Good Results: Visa’s stocks fell by 1.6% even after reporting better-than-expected results, with analysts noting slowing trends in January.
- Positive Economic and Inflation Reports: Reports suggesting cooling inflation and a strong economy fuel hopes of a balance between economic growth and moderate inflation.
- Fed’s Inflation Measure in December: The Federal Reserve’s preferred inflation measure showed a rate of 2.6% in December, matching the previous month.
- U.S. Consumer Spending Increase: Consumer spending in December was higher than expected, easing recession fears and suggesting sustained economic strength.
- Market Anticipation for Non-Inflationary Growth: Investors are optimistic about achieving non-inflationary growth, a combination of a strong economy and cooling inflation.
- Treasury Yields Post-Report Rise: Following the inflation report, the yield on the 10-year Treasury increased slightly to 4.15%.
- Fed Meeting Expectations: The upcoming Federal Reserve meeting is likely to leave interest rates unchanged, with divided opinions on potential rate cuts in March.
- Traders’ Bets on Further Rate Cuts: Financial markets are betting on more rate cuts this year than the Fed has indicated.
- American Express and Levi Strauss Reports: American Express shares surged 7.5% despite weaker quarterly results, and Levi Strauss rose 2.5% after announcing a workforce reduction plan.
- Global Market Movements: European markets were mostly up, while Asian markets showed mixed results, with Hong Kong and Japan’s indices falling.
The Associated Press has the story:
Wall Street holds near record highs, heading for another winning week
Newslooks- NEW YORK (AP) —
U.S. stocks are hanging near their record heights Friday as Wall Street heads toward the close of its 12th winning week in the last 13.
The S&P 500 was edging up by 0.1% in morning trading after setting a record high for five straight days. The Dow Jones Industrial Average was up 80 points, or 0.2%, and the Nasdaq composite was 0.1% lower.
Intel’s drop of 11.1% was dragging on the market even though the chip company reported stronger profit for the last three months of 2023 than analysts expected. Its forecasts for revenue and profit for the start of 2024 fell short of Wall Street’s estimates.
Visa also sank, down 1.6%, despite reporting better results than expected. Analysts called the figures solid but highlighted how the company described some slowing trends for January so far.
The U.S. stock market is nevertheless closing out another winning week as reports keep suggesting inflation is cooling while the economy continues to power higher. The unexpected backdrop has hopes high that Wall Street’s dream scenario can come true: one where a resilient economy drives profits higher for companies, while inflation moderates enough to get the Federal Reserve to cut interest rates many times this year.
The latest report on Friday showed the measure of inflation the Fed prefers to use behaved just about exactly as expected in December. Overall inflation by that measure was 2.6% during the month, matching November’s rate.
The Fed pays more attention to the inflation figure after ignoring prices for food and fuel, which can zigzag sharply month to month. That figure cooled to 2.9% from 3.2% and was a bit better than economists expected.
At the same time, spending by U.S. consumers strengthened by more in December than expected. That helped calm worries that a resilient U.S. economy, which has so far refused to fall into a long-predicted recession, would mean upward pressure on inflation.
The hope is still for the labor market to soften in upcoming months, further cooling pressure on inflation, but not enough to halt the economy’s growth. That has the market looking forward to what EY Chief Economist Gregory Daco calls “the ‘holy grail’ of non-inflationary growth.”
Treasury yields yo-yoed in the bond market following the report but later rose modestly. The yield on the 10-year Treasury climbed to 4.15% from 4.12% late Thursday.
The Federal Reserve’s next meeting next week will likely end with no change to interest rates, but traders are split on whether it could begin cutting rates in March. That would be a sharp turnaround from the last two years, when the Fed hiked its main interest rate to the highest level since 2001 in hopes of slowing the economy and hurting investment prices enough to get inflation under control.
Traders also are betting on the Fed cutting interest rates many more times this year than the three it’s indicated, according to data from CME Group.
Critics say that overzealousness may be setting financial markets up for disappointment after their big rallies in recent months.
For now, though, the mood is still mostly ebullient on Wall Street.
American Express jumped 7.5% for one of the bigger gains even though it reported weaker results for the latest quarter than expected. It gave forecasts for revenue and profit for the full year of 2024 that were stronger than analysts’, while also announcing plans to boost its dividend payout to investors.
Levi Strauss climbed 2.5% after reporting slightly stronger profit for the latest quarter than analysts expected. The denim giant also said it will cut 10% to 15% of its global corporate workforce as part of its plan to trim costs.
In stock markets abroad, indexes were higher across much of Europe but mixed in Asia.
Hong Kong’s Hang Seng slumped 1.6% to give back some of its strong gain for the week, which was spurred by Chinese authorities’ moves to stabilize markets and the world’s second-largest economy. Japan’s Nikkei 225 fell 1.3% to pare its big gain for the year so far.
