Stock market today: Stocks mixed as investors keep watchful eye on economy

Admin September 25, 2024

US stocks lost steam on Wednesday after markets hit their latest all-time highs as investors looked to new data for clues to the health of the economy and the chances of another jumbo rate cut.

The Dow Jones Industrial Average (^DJI) reversed earlier gains to fall about 0.6%, while the S&P 500 (^GSPC) also slipped into negative territory, declining around 0.1% on the heels of record closes for both major indexes. The tech-heavy Nasdaq Composite (^IXIC) remained the only major gauge in the green, up roughly 0.1%.

The question now becomes whether or not the US economy could find itself in a recession, with concerns fanned by a surprisingly weak reading on consumer confidence. The debate centers on whether the Federal Reserve lowered rates by a bigger-than-usual 0.5% in response to a slowing economy and what further malaise means for another hoped-for deep cut.

On the data front, new home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.

Mortgage applications, however, jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.

But the spotlight is firmly on Thursday’s second quarter GDP print and Friday’s crucial reading on the PCE index — the inflation gauge favored by the Fed.

Speaking of the central bank, the parade of Fed speakers continues with governor Adriana Kugler, whose comments will likewise be scrutinized for insight into the size and pace of coming rate cuts when she appears later Wednesday.

Live6 updates

Wed, September 25, 2024 at 7:30 PM GMT+2

Warren Buffett further trims stake in Bank of America

Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B) sold more of its holdings in Bank of America (BAC).

Yahoo Finance’s David Hollerith has more:

Late Tuesday, Berkshire Hathaway said it further trimmed its stake in the country’s second-largest bank by 21.6 million shares, making approximately $862.7 million in profits from the sales.

Berkshire has sold BofA stock in 10 of the past 11 weeks starting in mid-July, unloading a total of 218.5 million shares and earning $8.9 billion on those sales.

Berkshire still holds a 10.5% stake in the country’s largest bank and the price of Bank of America’s stock has fallen roughly just as much since Buffet began selling his firm’s longest held bank stock position.

BofA is still up 16% so far this year, trailing rivals Goldman Sachs (GS), JPMorgan Chase (JPM), and Citigroup (C). Its stock was down slightly Wednesday morning.

Read more here.
Wed, September 25, 2024 at 6:35 PM GMT+2

Sector check: Utilities lead while energy lags

Utilities (XLU) led Wednesday’s sector action, up about 0.7%. The sector, which encompasses one of the most defensive segments of the economy, has seen more of a boost in recent months amid the artificial intelligence boom. It’s also been viewed as a hedge against a possible economic downturn.

Technology (XLK), real estate (XLRE), and communication services (XLC) followed to trade mostly in the green, while energy (XLE) served as the day’s biggest laggard, down about 1.6%.

Crude oil (CL=F) fell more than 2% on Wednesday to trade around $70 a barrel, reversing positive trends just one day prior as investors bet on new China stimulus to boost demand. Brent (BZ=F), the international benchmark price, also fell Wednesday to hover north of $72.

(Source: Yahoo Finance)
Wed, September 25, 2024 at 5:55 PM GMT+2

Chip chat: Nvidia shares are rising — here’s why

Nvidia (NVDA), a top trending ticker on Yahoo Finance, climbed as much as 3% higher on Wednesday after Mizuho analyst Jordan Klein cited a recent Bain report, which projected the market for artificial intelligence hardware and software could balloon to as much as $990 billion by 2027 — up from current levels of about $185 billion.

The analyst said the forecast “could calm buy-side worry/uncertainty over sustainability of large cloud [capital expenditures] and AI investment spending well beyond 2025.”

The AI darling’s stock is also moving higher on reports that CEO Jensen Huang is done selling his shares in the company. Huang has sold more than $700 million worth of the company’s stock over the past few months.

Other chip stocks moved in tandem with Nvidia.

Semiconductor giant Micron (MU) inched up about 1% ahead of its highly anticipated fourth quarter earnings report. Intel (INTC) also jumped about 4%, just one day after the company revealed a pair of artificial intelligence chips as it seeks to improve its data center business.
Wed, September 25, 2024 at 5:26 PM GMT+2

What China’s stimulus package means for stocks

China just announced its biggest economic stimulus since the pandemic.

Yahoo Finance’s Jared Blikre breaks down what the stimulus means for stocks and commodities worldwide:

After the details of the monetary stimulus and support for the stock market were announced Tuesday by the People’s Bank of China (PBOC), the nation’s benchmark index, the CSI 300 (000300.SS), surged 4.3% — its largest jump since July 2020.

The country’s currency, the renminbi (CNH=X), dropped 0.6% — the most since the Japanese yen imploded in early August.

In the US, stocks rose, but the biggest effect was felt in commodities. Silver futures (SI=F) skyrocketed over 4.5% to a decade-plus high. Copper futures (HG=F) — already on a nine-day tear — notched a 10th straight win as it surged to a two-month high.

The stimulus, China’s latest attempt to pull its economy out of a slump caused by a shaky property market and deflationary pressures, includes over $325 billion in measures, mostly via monetary — as opposed to fiscal — channels.

On Wednesday, Chinese shares extended their rally, with the Shanghai Composite finishing up 1.2%.

However, there remains growing skepticism about whether the steps will successfully turn around its economy.

Read more about the impact here.
Wed, September 25, 2024 at 4:19 PM GMT+2

New home sales fall in August

New home sales declined in August following a sharp increase the month prior as ultra-high mortgage rates and lofty prices kept buyers mostly on the sidelines.

New single-family home sales slid 4.7% month-over-month to an annualized rate of 716,000, according to government data released Wednesday morning. Sales did fall less than expected, however, as economists had been anticipating a decline of 5.3%.

The median sales price decreased 4.6% to $420,600, marking the seventh straight month of year-over-year price declines. Mortgage rates are also declining as rates have fallen for eight consecutive weeks.

Mortgage applications jumped to the highest level since 2022, according to MBA data released before the bell. The growth was driven by homeowners seeking to refinance loans as rates drop.
Wed, September 25, 2024 at 3:35 PM GMT+2

S&P 500, Dow open higher

The S&P 500 and Dow opened in positive territory on Wednesday after each hit an all-time high the day prior.

The benchmark S&P 500 (^GSPC) rose about 0.1%, while the Dow Jones Industrial Average (^DJI) inched up roughly 0.2%. The tech-heavy Nasdaq Composite (^IXIC) hugged the flat line.