Today there was all kinds of wavering in the indexes, except the Nasdaq which was a straight-shot down. But the Dow swung back and forth between a high of a +325 and a low of +65, but at least it stayed in the black thanks to a strong showing by American Express. But the tech indexes went well into the red, partly due to a revenue miss by Netflix but also to yet another arrow from the Fed, today with Chicago Prez opining that inflation has indeed “stalled” this year.
As today’s expert put it, “the more the rate picture doesn’t look super-favorable, even more important is earnings growth.” The tech indexes have had six straight losing sessions, the S&P on its biggest weekly decline since last March and down 5.46% since its all-time high on March 28th. The overall tech index today is down 4.12% with a weekly drop of 9.23%, the biggest in two years. Volume for once was a little above average at 11.48 billion.
Nasdaq, S&P tumble as Netflix, chip
stocks drag; AmEx boosts Dow
Fri April 19, 2024 4:35 PM
DJ: 37,775.38 +22.07 NAS: 15,601.50 -81.87 S&P: 5,011.12 -11.09 4/18
DJ: 37,986.40 +211.02 NAS: 15,282.01 -319.49 S&P: 4,967.23
-43.89 4/19
NEW YORK, April 19 (Reuters) - The Nasdaq and the S&P 500 ended lower on Friday as
Netflix (NFLX.O), opens new tab shares
weighed, but American Express (AXP.N), opens new tab kept
the Dow afloat after quarterly earnings from both companies, while growing
pessimism that the Federal Reserve would cut interest rates soon also dented
sentiment. Netflix slumped as one of the
bigger drags on the benchmark S&P index and Nasdaq after the video
streaming company's second-quarter revenue view fell short of analysts'
expectations while the company also unexpectedly said it would no longer provide subscriber counts. But the price-weighted Dow Industrials rose,
thanks in part to a climb in American Express, after the payments company reported first-quarter profit that was above
expectations.
Equities have struggled recently following a five-month rally
that started in November, in part due to expectations the Fed was likely to cut
interest rates in the first half of the year.
But a recent string of hotter-than-expected inflation data, strong labor
market data, geopolitical tensions in the Middle East that have sparked a rise
in oil prices, and comments from Federal Reserve officials including Chair
Jerome Powell has caused market participants to dial back the timing of any
rate cut from the central bank.
"You've
seen rate-cutting expectations just continue to come out of the market,
and they should be because there's nothing about the data that says they should cut," said
Mike Dickson, head of research and quantitative strategies at Horizon
Investments in Charlotte, North Carolina.
"So in that environment when you're sitting here near highs, that means it's not going to be
rates going down and multiples expanding because of that, that has to be
driven by earnings growth. And so just the more the rate picture doesn't look super-favorable for lower
rates, even more important
is the earnings growth picture."
The Dow Jones Industrial
Average (.DJI), opens new tab rose
211.02 points, or 0.56%, to 37,986.40, the S&P 500 (.SPX), opens new tab lost
43.89 points, or 0.88%, to 4,967.23 and the Nasdaq Composite (.IXIC), opens new tab lost
319.49 points, or 2.05%, to 15,282.01. For the week, the S&P 500 fell 3.05%, the
Nasdaq declined 5.52%, and the Dow climbed 0.01%. The S&P suffered its
biggest weekly decline since March 2023 and the Nasdaq its largest since the
week of Oct. 31, 2022. The S&P and
Nasdaq have fallen for six
straight sessions, the longest streak of declines for each since October 2022, with the
S&P now down 5.46% from its closing
record on March 28.
Progress on bringing down
inflation has "stalled" this year, said Chicago Fed President Austan Goolsbee, the latest U.S. central
banker to drop an earlier focus on the coming need for interest rate cuts.
Chip-related stocks, some of the best performers of the year thanks to their
association with artificial intelligence, also tumbled, with the Philadelphia
Semiconductor Index (.SOX), opens new tab down 4.12%. The index recorded its biggest weekly percentage
decline in nearly two years with a plunge of 9.23%. Shares of Paramount Global (PARA.O), opens new tab surged
13.4% after a person familiar with the matter told Reuters that Sony Pictures
Entertainment (6758.T), opens new tab and
Apollo Global Management (APO.N), opens new tab are
discussing making a joint bid for the company.
On the NYSE advancing issues outnumbered declining ones by a
1.8-to-1 ratio and a 1.08-to-1 ratio on the Nasdaq. There were 31 new highs and 86 new lows,
while on the Nasdaq there were 34 new highs and 208 new lows.
Volume on U.S. exchanges
was 11.48 billion shares, compared with
the 10.99 billion average for the full session over the last 20 trading days.
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