The S&P 500 and the Dow scored record closing highs on Friday, with the big boosts from financial stocks after banks reported strong quarterly results while the latest inflation data fueled expectations for a U.S. Federal Reserve rate cut in November.
Market Snapshot
The Dow Jones Industrial Average rose 409.74 points, or 0.97%, to 42,863.86, the S&P 500 rose 34.98 points, or 0.61%, to 5,815.03 and the Nasdaq Composite rose 60.89 points, or 0.33%, to 18,342.94.
Market Movers
Tesla fell 8.8% after the electric-vehicle maker’s robotaxi event late Thursday underwhelmed investors. Tesla unveiled a new “cybercab” without a steering wheel or pedals that would cost under $30,000, and a “robovan” that can transport up to 20 people at a time or carry goods.
CEO Elon Musk also talked about starting limited robotaxi service as early as 2025. But first the company planned to deploy a fully autonomous version of its Full Self-Driving software in Texas and California next year, which would run on two of its existing vehicles, the Model 3 and Model Y. The cybercab will come in 2027.
Ride-hailing giant Uber Technologies rose 11% after Tesla’s event. Truist analyst Youssef Squali said the EV maker’s announcements weren’t “likely to alter the competitive landscape near-term” for Uber. Smaller rival Lyft(LYFT)$, jumped 9.6%.
JPMorgan Chase was up 4.4% after posting third-quarter earnings of $4.37 a share, topping estimates of $3.99. Net interest income in the period was $23.4 billion, topping estimates of $22.7 billion.
Wells Fargo reported third-quarter earnings of $1.42 a share, topping analysts’ estimates of $1.28. Net income fell 11% from a year ago to $5.1 billion; analysts had expected $4.4 billion. The stock was up 5.6%.
BlackRock, the world’s largest asset manager, reported adjusted third-quarter earnings of $11.46 a share, topping analysts’ estimates of $10.36. BlackRock reported a record $11.5 trillion of assets under management in the third quarter, up from $9.1 trillion a year earlier and $10.6 trillion last quarter. Shares rose 3.6%.
Fastenal rose 9.8% after the industrial distribution company reported better-than-expected third-quarter earnings.
Aehr Test Systems jumped 20% after fiscal first-quarter earnings and revenue fell from a year earlier but the supplier of semiconductor test and burn-in equipment said it was moving into large and fast-growing markets, “such as artificial intelligence processors, gallium nitride power semiconductors, hard disk drive components and flash memory devices.”
A.O. Smith, the water-technology company, lowered its 2024 outlook and the stock tumbled 6.3%.
“We expect quarter-over-quarter improvement in North America water heater volumes in the fourth quarter; however, we project the softness in China will persist through the remainder of 2024,” said CEO Kevin Wheeler in a statement.
Affirm, the buy-now-pay-later company, was upgraded to Overweight from Equal Weight at Wells Fargo. Shares were up 12%.
Market News
US Producer Prices Flat; Higher Monthly Core Inflation Expected in September
U.S. producer prices were unchanged in September as a small rise in the cost of services was offset by cheaper goods, pointing to a still-favorable inflation outlook and supporting views that the Federal Reserve would cut interest rates again next month.
The unexpected flat reading reported by the Labor Department on Friday followed data on Thursday showing consumer prices increased slightly more than expected last month. But some components that go into the personal consumption expenditures (PCE) price indexes were a bit firmer, suggesting fairly warmer underlying inflation in September. The U.S. central bank tracks the PCE price indexes for its 2% inflation target.
Boeing to Cut Workforce by 10% as Strike Eats into Reserves
Boeing Co. plans to slash its global workforce by about 10% and announced $5 billion in charges across its commercial airplanes and defense businesses, underscoring the depths of the planemaker’s financial woes amid a crippling labor strike.
The cuts translate to roughly 17,000 positions and will include executives, managers and employees, Chief Executive Officer Kelly Ortberg told employees in a memo on Friday. The company also plans to delay the introduction of its first 777X jetliner, and separately announced that it expects third-quarter sales to come in well below Wall Street estimates.