A dirty finish for Wall Street on Friday saw a gain for the day for the Dow and a record, but small blobs of red ink for the S&P 500 and Nasdaq as more investors took a long look at the economy and the Fed’s rate cut, pondering whether there was a deeper message there.
A very weak quarterly result from parcel and logistics giant FedEx didn’t help, as it reported a 25% slump in earnings for the three months to the end of August. The company downgraded its outlook for the next nine months and revealed that customers had been abandoning its high-profit priority services for slower, cheaper options.
In Europe, Mercedes joined rival BMW in downgrading earnings, partly blaming a slump in demand in China for top-of-the-range vehicles. This trend has also damaged the outlook and share prices of a string of luxury goods companies, including those in booze, watches, clothing, perfumes, and shoes.
The European Commission has made two cuts to its key rates of 0.25% each to help ease the pain on the EU economy. However, there are problems at home as well, including weak growth and demand in Germany—particularly concerning VW and its issues with falling sales, rising costs, and too many staff and factories—and growing political tensions in France, Germany, and Spain.
By Friday’s close, the outlook on Wall Street wasn’t as rosy as it had been after Thursday’s booming session. A late story about a possible bid for chipmaker Intel from rival Broadcom will keep some pots bubbling away this week.
At Friday’s close, the Dow was up 38.17 points, or 0.09%, for a new closing high of 42,063.36. The S&P 500 eased 0.19% to end at 5,702.55, while Nasdaq dropped 0.36% to end at 17,948.32. On Thursday, the Dow hit a record above 42,000, and the S&P 500 climbed above 5,700 for the first time.
All three major averages had weekly gains. The S&P 500 rose 1.36%, marking its fifth positive week out of the past six. The index is up more than 19% in 2024. The Dow ended the week higher by 1.62%, while the tech-heavy Nasdaq gained 1.49%.
Apple and Microsoft remained first and second in the rankings of valuable companies at week’s end—Apple with a market cap of $US3.47 trillion (up 5.25% for the week) and Microsoft shares up just over 1%, valued at $US3.26 trillion. Nvidia shares eased 0.6% over the week, leaving its value at $US2.85 trillion.
Trump Media, the Donald Trump social media company, suffered a 7.8% drop on Friday, ending the week down more than 26%.
Trump, who holds a 57% stake, has seen the company’s share price fall by 80% since April and 65% since July 15, two days after the assassination attempt. He has indicated that he will not sell his shares, so with only 30% of shares available for sale, any significant disposal could strongly influence the share price.
Market figures show that after escrow shares became available for sale on September 19, volumes jumped sharply on Friday to nearly 20 million shares.
The company’s value ended at $US2.71 billion, with Trump’s stake now worth just over $US1.5 billion. The shares hit a new 52-week low of $US13.55 on Friday, down from the previous low before the merger when its predecessor was a cash box company.