Dow ends above 40,000 milestone, indexes notch up weekly gains

It was seesaw action all day with a particularly big dive right around 1:30 p.m. which then turned into a steep recovery around 2:30 p.m. Because the Nasdaq and S&P were already so far in the red, even the steep recovery only put them near break-even. But the Dow had a glorious day closing up 134 points.  The big news was that by a big 3-1/2 points, the Dow closed above the 40,000 milestone, another all-time high.  

There’s no real explanation for the erratic trading, nor for the big rally near the end of the day, just that this week’s inflation news was mixed (but was it really? Didn’t Powell say things were looking better, thus the big rally on Wednesday?) and everyone’s waiting for next week’s Nvidia report. Today’s expert is calling today a “breather” but with the Dow showing a triple-digit gain and volume still being through the roof at 15.6 billion, how is that a breather? We’re on our fourth straight week of gains. 

Dow ends above 40,000 milestone, indexes notch up weekly gains

By Chibuike Oguh and Shristi Achar A

Fri May 17, 2024 4:48 PM

DJ: 39,869.38  -38.62          NAS: 16,698.32  -44.07         S&P: 5,297.10  -11.05      5/16

DJ: 40,003.59  +134.21       NAS: 16,685.97  -12.35         S&P: 5,303.27  +6.17       5/17

NEW YORK, May 17 (Reuters) - The Dow Jones industrial average closed above the 40,000 mark for the first time on Friday, with other major indexes also scoring weekly gains, as data supported expectations for interest rate cuts by the Federal Reserve this year.  The benchmark S&P 500 (.SPX), opens new tab edged higher after paring losses while the Nasdaq (.IXIC), opens new tab fell, but both chalked up a fourth straight week of gains. The Dow (.DJI), opens new tab rose to end the fifth week of advances in a row.

Strong corporate results and inflation and other economic data have bolstered investor hopes for Fed rate cuts this year.  Eight out of the 11 S&P 500 sectors advanced, with energy (.SPNY), opens new tab leading gains while technology (.SPLRCT), opens new tab was the biggest loser. For the week, Dow gained 1.24%, S&P 500 rose 1.54%, and Nasdaq climbed 2.11%.

"Today is a bit of a digestion day: we just broke out through record highs and now we're on a fourth straight week of gains, and the market appears to take a breaker," said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta.  Traders see a 68% chance of the Fed's first rate cut in September, the CME FedWatch Tool showed.

The Dow Jones Industrial Average (.DJI), opens new tab rose 134.21 points, or 0.34%, to 40,003.59, the S&P 500 (.SPX), opens new tab gained 6.17 points, or 0.12%, to 5,303.27 and the Nasdaq Composite (.IXIC), opens new tab lost 12.35 points, or 0.07%, to 16,685.97.

"For all the times that I've seen the market hit milestones and new highs, there's almost always consolidation around it even though it seems it's all psychological," said Tom Plumb, chief executive and portfolio manager at Plumb Funds in Madison, Wisconsin.  "People have got mixed signals on inflation this week and the next big catalyst is next week when Nvidia reports. So it's one of those days when you seem to be biding your time."

Advanced Micro Devices (AMD.O), opens new tab gained 1.1% after Microsoft (MSFT.O), opens new tab said it plans to offer its cloud computing customers a platform of AMD artificial intelligence chips that will compete with components made by Nvidia (NVDA.O), opens new tab.  Reddit (RDDT.N), opens new tab rose 10% following a partnership with OpenAI to bring its content to ChatGPT.  GameStop (GME.N), opens new tab dropped nearly 20% after filing for a mixed-shelf offering and saying it expects first-quarter net sales to drop from a year ago.

About 15.6 billion shares changed hands across U.S. exchanges, compared with an average of about 11.7 billion shares over the last 20 sessions.

Advancing issues outnumbered decliners by a 1.18-to-1 ratio on the NYSE. On the Nasdaq, 2,039 stocks rose and 2,221 fell as declining issues outnumbered advancers by a 1.09-to-1 ratio.  The S&P 500 posted 45 new 52-week highs and one new low while the Nasdaq recorded 157 new highs and 68 new lows.