Dow Jones, Nasdaq, and S&P 500 Market Update: Intel Stocks Plummet, Federal Reserve Inflation Figures, and Company Earnings

2024-01-26 15:15:17

Around 3:00 p.m. GMT, the Dow Jones index advanced 0.07%, the Nasdaq, weighed down by Intel (-12%), slipped 0.25%. The S&P 500 fell by 0.07%.

The day before, the Dow Jones had appreciated by 0.64% to 38,049.13 points, the Nasdaq rose by 0.18% to 15,510.50 points and the broader S&P 500 index gained 0.53% to 4,894. .16 points. The latter signed his fifth record in a row at the closing on Thursday.

Even the Nasdaq managed to finish in the green, despite the plunge of Tesla (-12.13%), which lost some $80 billion in valuation over the session.

On Friday, it was around microprocessor giant Intel to collapse of this magnitude following reporting lower-than-expected guidance for the current quarter. Intel said it now expected sales of $12.2 billion to $13.2 billion, well below the $14.2 billion expected by analysts.

This warning also caused sector stocks such as AMD (-2.23%), Nvidia (-1.29%), Broadcom (-1.72%), Micron Technology (-1.89%) and Qualcomm (- 1.76%).

Shortly before the market opened, the Commerce Department released inflation figures, measured by the PCE index, the Federal Reserve’s (Fed) favorite tool for gauging price movements.

The price increase remained at 2.6% in December year-on-year. Over one month, however, it started to rise once more, with prices increasing by 0.2% compared to November, as expected, while they had fallen by 0.1% between October and November.

But excluding food and energy, so-called “underlying” inflation fell to 2.9%, its lowest level in almost three years.

Furthermore, household income increased a little slower in December than in November, at 0.3% compared to 0.4%.

But their spending increased more quickly, driven by end-of-year holiday purchases, to 0.7% compared to 0.4%.

“This report shows steady revenue growth and strong spending, along with the Fed’s preferred inflation measure falling below 3%,” commented Robert Frick, economist for Navy Federal Credit Union.

“All of this constitutes ingredients in favor of future rate cuts even if inflation has rebounded over one month,” added the analyst.

Bond rates increased slightly to 4.16% for the ten-year bond, compared to 4.11% the day before.

Elsewhere on the stock market, Salesforce, the customer relations software group which is part of the Dow Jones, gained 0.56% while the company was preparing to cut 700 jobs, according to the Wall Street Journal, or 1% of its workforce. worldwide.

Echoing the consumer’s enthusiasm, the American Express group soared by 8%. The credit card company posted a 27% jump in quarterly earnings per share, slower than the previous two quarters, but it forecasts revenue growth of 9% to 11% in 2024, within the range high of analyst projections.

Its competitor Visa fell 2.20% despite increasing results but the group reported a slowdown in the growth of payment transactions in January.

The manufacturer of toothpaste and hygiene and household products Colgate-Palmolive was smiling (+2.08%) following financial performance above market expectations in the fourth quarter, anticipating the maintenance of this “growth dynamic” in 2024 and beyond.

Concerning the current financial year, the group forecasts net growth in sales between 1% and 4% and in net profit per share on a comparable basis between 5 and 9%.

The group claims a global market share of 41.1% in toothpaste and 31.5% in toothbrushes.

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