Stocks are hovering near record levels as Wall Street approaches the conclusion of its 12th winning week out of the last 13. In early trading on Friday, the S&P 500 remained relatively unchanged after achieving record highs for five consecutive days. The Dow saw a marginal increase of 0.1%, while the Nasdaq composite experienced a slight dip of 0.2%. Intel faced a significant decline after projecting revenue and profit for the beginning of 2024 that fell short of Wall Street’s expectations.
Wall Street has seen modest declines early on Friday, though it is on track to close the first week of the earnings season with gains. The futures for the S&P 500 and Dow Jones industrials showed minor decreases of less than 0.1% before the opening bell.
In premarket trading, Intel suffered a notable drop of more than 10%, impacting the entire chip-making sector. This followed a weak first-quarter forecast from Intel, with the company anticipating an adjusted earning of 13 cents per share, significantly below the 21 cents per share expected by Wall Street. The sales guidance provided by the California-based company also fell short of projections.
Recent market buoyancy has been attributed to robust economic data, coupled with receding inflation fears, fostering optimism about the possibility of achieving a “soft landing” for the U.S. economy – curbing inflation without triggering a recession.
The initial estimate by the U.S. government reported a 3.3% annual growth rate for the U.S. economy in the last quarter of 2023, surpassing the 1.8% growth anticipated by economists. A resilient economy is seen as a positive factor for company profits, a key determinant influencing stock prices.
The report also offered encouraging indications that inflation continued to moderate at the close of 2023. There is anticipation that inflation has cooled sufficiently for the Federal Reserve to consider cutting interest rates this year, thereby alleviating pressure on financial markets and boosting investment prices.
The Commerce Department is set to release the monthly U.S. consumer spending report, including the Fed’s preferred inflation measure. This report holds significance as the last major inflation update before the upcoming Fed policy meeting, where it is widely expected that the central bank will maintain its benchmark lending rate for the fourth consecutive time.
In global markets, Tokyo’s Nikkei 225 declined by 1.3%, while Chinese markets halted their winning streak following government moves to stabilize share prices and the property sector. Hong Kong’s Hang Seng slipped by 1.6%, and the Shanghai Composite showed marginal change, rising by 0.1%. South Korea’s Kospi rose by 0.3%, while markets in Australia were closed for a national holiday.
European markets displayed positive movements, with France’s CAC 40 surging by 2.3%, Britain’s FTSE 100 adding 1.6%, and Germany’s DAX seeing a more modest increase of 0.3%.
In energy trading, benchmark U.S. crude declined by 72 cents to $76.64 a barrel, and Brent crude, the international standard, fell by 63 cents to $81.33 a barrel in electronic trading on the New York Mercantile Exchange.
In currency trading, the U.S. dollar edged up to 147.79 Japanese yen from 147.64 yen, and the euro increased to $1.0872 from $1.0848.
On Thursday, the S&P 500 added 0.4% to reach 4,894.16, setting a record for the fifth consecutive day. The Dow Jones Industrial Average climbed by 0.6%, and the Nasdaq composite gained 0.2%.
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