Stock Rally Continues as S&P 500, Nasdaq Composite Wrap Up Best Week of 2024

Biggest S&P 500 Movers on Friday

6 hr 33 min ago

Advancers

• Warner Bros. Discovery (WBD) shares notched the top performance of any S&P 500 stock for the second straight day, surging 10.8% on Friday. The entertainment giant said Thursday that it renewed its distribution deal with Charter Communications (CHTR), a year before the existing agreement was set to expire.
• Shares of online crafts marketplace Etsy (ETSY) jumped 7.6% on the day, bouncing off a 52-week low set by the stock in intraday trading earlier in the week. A proposal by the Biden administration to limit tariff exemptions that often benefit Chinese e-commerce companies helped push Etsy shares higher.
• Align Technology (ALGN) shares added 6.5% on Friday as Piper Sandler reiterated its “overweight” rating for shares of the provider of clear teeth aligners and other dental products. Analysts pointed to strong trends in the U.S. orthodontics market over recent months that could drive strong quarterly results.

Decliners

• Adobe (ADBE) shares dropped 8.5%, the biggest daily decline in the S&P 500, following the release of the software firm’s results for its fiscal third quarter. Although sales and profits grew from a year ago and exceeded analysts’ forecasts, Adobe’s fourth-quarter sales guidance came in below expectations.
• Shares of GPS navigation and wearable technology provider Garmin (GRMN) slid 5.1% after the investment bank Barclays downgraded the stock to “underweight” and reduced its price target. Analysts suggested Garmin’s valuation has become overextended following a year of strong gains for the stock. Barclays analysts also said Garmin could see softer sales in the second half of the year.

• Boeing (BA) shares fell 3.7% as thousands of workers for the aviation giant went on strike Friday. The first strike at the company in more than 16 years began after workers voted overwhelmingly to reject a contract deal. The labor dispute could complicate Boeing’s efforts to stabilize its supply chains and resolve production issues after a series of safety incidents.

-Michael Bromberg

Big Rate Cuts Normally Come During Times of Crisis

6 hr 48 min ago

With expectations rising that the Federal Reserve could cut its benchmark lending rate by half a percentage point next week, it’s worth noting that, over the last 20 years, most half-point cuts have come amid or immediately before a full-blown economic crisis.

–Colin Laidley

Wall Street Boosts Bets For Big Rate Cut

6 hr 54 min ago

Market participants raised their bets on Friday that the Federal Reserve will dive headfirst into rate cuts at its policy meeting next week. 

Traders put the odds that the Federal Open Markets Committee will cut its benchmark federal funds rate by 50 basis points next Wednesday at 45%, according to CME’s FedWatch tool, which uses fed futures trading data to forecast interest rate decisions.

The chances of a cut of 50 basis points were up significantly from earlier in the week when inflation data surprised to the upside, providing markets with a fresh reminder that prices are still rising faster than the Fed would like. That data seemed to confirm for Wall Street that, despite the risks of a cooling labor market, officials would approach rate cuts cautiously to avoid undoing the progress they’ve made in taming decades-high inflation. 

Friday’s rise in expectations for a jumbo cut could stem from comments from former New York Fed President Bill Dudley, who said at a forum in Singapore on Friday that he saw “a strong case” for a 50-basis-point cut. Dudley argued that the rising risks to the labor market outweighed any lingering upside inflation risks.

Dudley also said that the federal funds rate is currently as much as 200 basis points above the neutral rate, at which policy is neither accommodative nor restrictive. “So the question is,” he said, “‘Why don’t you just get started?'”

–Colin Laidley

Uber Shares Rise After News of Expanded Waymo Partnership

9 hr 44 min ago

Uber Technologies (UBER) shares jumped Friday after the ride-share provider said it would expand its partnership with Alphabet-owned (GOOGL) autonomous vehicle technology firm Waymo to add more driverless car rides.

Uber said the service will be offered in Austin, Texas and Atlanta, Georgia beginning early next year. The company said it will “manage and dispatch a fleet of Waymo’s fully autonomous, all-electric Jaguar I-PACE vehicles that will grow to hundreds over time.” Uber already provides driverless pickups in Phoenix, Arizona.

Under the agreement, Uber will be responsible for fleet management services, such as cleaning, repair, and other general depot operations. Waymo will continue to handle testing and operation of the technology, including roadside assistance and some rider support functions.

Uber shares were up 5.5% in late trading and have gained about 17% so far this year.

–Bill McColl

Another Bullish Analyst Report Boosts Arm Stock

10 hr 6 min ago

Arm Holdings’ (ARM) U.S.-listed shares were up 6% Friday, extending a run of gains after an analyst started coverage of the chip-design company’s stock with an upbeat rating.

Raymond James initiated coverage on the stock with an “overweight” rating, citing the company’s strong position in the generative artificial intelligence (AI) market. Analyst Srini Pajjuri gave Arm a price target of $160, about 15% above Thursday’s close.

“ARM is well-positioned to benefit from rapid growth of GenAI in the cloud and at the edge,” Pajjuri wrote. Pajjuri said that edge AI—essentially the use of AI on local devices—was “a key catalyst” for Arm’s Armv9 architecture, which is used in the new Apple (AAPL) iPhone 16’s processor.

Raymond James sees Arm’s technology finding its way into more mobile devices, as well as auto, data center, and PC markets.

Morgan Stanley on Wednesday made Arm “Our New Top Pick.” The analysts there also cited edge AI as part of their reasoning. Arm’s ADRs have about doubled in 2024.

–Bill McColl

Nvidia Remains ‘Best Way to Play AI’

12 hr 2 min ago

Nvidia (NVDA) stock was on track Friday to notch one of its best weeks of the year and recover most of its losses from previous weeks as investors heeded analysts’ recommendations and bought the dip. 

Nvidia shares were little changed midday Friday, putting the stock up nearly 16% for the week in its second massive rebound in a volatile month for the chipmaker’s stock. 

Shares got a boost earlier this week when CEO Jensen Huang, speaking at a Goldman Sachs conference, called demand for Nvidia’s products “incredible” and touted the size of the company’s market opportunity.

The sheer strength of demand is one major reason that analysts still have Nvidia at the top of their buy lists despite the stock’s loss of momentum lately. Bernstein analysts in a note earlier this week reiterated Nvidia was one of their top semiconductor picks, calling it “the best way to play AI.”

Read the full article here.

–Colin Laidley

For Intel Stock, It’s Been ‘One Disaster After Another’

12 hr 50 min ago

Intel’s (INTC) stock, once a tech darling, has fallen on hard times.

And while recent reports of possible strategic changes and deal activity have hinted at a path to a rebound for the chipmaker’s stock—Wall Street is broadly optimistic that it will rise again—analysts admit that’s far from certain.

“Intel right now is just a series of one disaster after another,” Bernstein analysts wrote in a note Thursday.

Intel shares were up nearly 2% around midday Friday amid a broad market rally. The stock has lost about about a third of its value since Intel reported its latest earnings in early August, and more than 60% since the start of 2024.

Read the full story here.

–Kara Greenberg

Adobe Stock Plunges on Light Outlook

14 hr 6 min ago

Adobe (ADBE) shares tumbled 9% Friday morning after the digital multimedia software maker issued a disappointing current-quarter outlook that overshadowed better-than-expected results for its fiscal third quarter.

The stock has broken down below the lower trendline of an ascending triangle pattern, a move that could start a new trend lower.

Investors should watch important support levels on Adobe’s chart at $500, $439, $386, and $333, while keeping an eye on the $550 area during a countertrend move.

Read the full technical analysis piece here.

–Timothy Smith

Major Indexes Approaching End-August Levels

15 hr 43 min ago

Major U.S. stock indexes have recovered almost all of the ground lost during the early-September swoon that generated the worst weekly losses in more than a year.

Heading into Friday’s session, the Nasdaq Composite and S&P 500, which are riding four-session winnings streaks, are less than 1% below their end-August levels. The Dow Jones Industrial Average, which has finished higher in three of the last four sessions, is 1.1% below where it closed last month.

The S&P 500 and Nasdaq are up 3.5% and 5.3%, respectively, this week, while the Dow has tacked on 1.9%.

Stock Futures Point to Higher Open for Major Indexes

16 hr 42 min ago

Futures tied to the Dow Jones Industrial Average were up 0.1%

S&P 500 futures were up 0.2%.

Nasdaq 100 futures were up less than 0.1%.