NEW YORK (Dow Jones)—Wall Street concluded the week with a modest gain. The Dow Jones Index reached a new record high of 42,190 points, propelled mainly by Intel shares, which saw an increase of 3.3 percent due to ongoing speculation about a potential takeover. Market participants generally described the situation as a consolidation following the rally after last week’s interest rate cut. Following a 0.5 percentage point cut by the US Federal Reserve in its key interest rate, both the Dow Jones Index and the S&P 500 attained new record levels.
The Dow Jones Index rose by 0.1 percent to 42,125 points. The S&P 500 increased by 0.3 percent, while the Nasdaq Composite climbed by 0.1 percent. There were a total of 1,578 gaining stocks (compared to 963 on Friday) and 1,237 losing stocks (down from 1,806). Additionally, 51 stocks (down from 90) closed unchanged.
In light of the Federal Reserve’s shift in interest rate policy, the markets are left wondering whether the US economy can achieve a “soft landing” and if inflation will remain under control. A survey from S&P Global indicated that activity growth in the US economy slowed somewhat in September. The composite index for production in the private sector—encompassing both industry and services—dropped to 54.4 from 54.6 points the previous month.
This data suggests “another sluggish increase in employment in September,” commented Samuel Tombs from Pantheon. He also pointed out that the data indicates a cooling of inflation.
However, the Chicago Fed National Activity Index for August rose to plus 0.12 (with July revised to minus 0.42). Preliminary figures for July had initially reported minus 0.32 points.
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, has advocated for further interest rate cuts. He stated that interest rates should decrease to facilitate a “soft landing” for the economy. While inflation has significantly declined, the labor market is showing signs of weakness, yet interest rates remain close to the highest levels seen in 20 years, even after last week’s half-percentage point reduction.
Intel Again in the Spotlight
Intel shares continued to attract attention, extending the gains from Friday. According to a report from Bloomberg, Apollo Global Management (+0.6%) has proposed to invest up to 5 billion dollars in the chip maker. The Wall Street Journal reported on Friday that Qualcomm (-1.8%) recently approached Intel regarding a possible acquisition. Subsequently, Intel shares surged by approximately 3 percent by the week’s end. However, Stifel analyst Ruben Roy noted that a takeover of Intel by Qualcomm is unlikely to receive regulatory approval.
Tesla shares rose by 4.9 percent. Analysts at Barclays anticipate deliveries of about 470,000 vehicles in the third quarter, surpassing the consensus estimate of around 460,000. Boeing shares climbed by 2.0 percent, as the company has made a new proposal to the striking employees’ union in hopes of resolving the strikes, which are costing the financially strained manufacturer hundreds of millions of dollars each week.
Dollar Slightly Stronger – Oil Prices Decline
In the foreign exchange market, the dollar showed a slight increase. The dollar index rose by 0.1 percent. Conversely, the euro fell by 0.4 percent to 1.1114 dollars following weaker-than-expected purchasing managers’ indices from both Germany and France.
Oil prices experienced a sharper decline after initial gains. Both WTI and Brent dropped by as much as 0.7 percent following last week’s increases. Market participants referenced comments made by Iranian President Masoud Pezeshkian at the UN on Monday, where he stated that Iran does not seek a wider conflict in the Middle East. These remarks followed an intensification of Israeli attacks against Iran-backed Hezbollah in Lebanon, which had boosted oil prices earlier in trading.
Bond yields saw a moderate increase, with the yield on ten-year bonds rising by 0.6 basis points to 3.75 percent. Analysts noted that the recently published US economic data had minimal impact on the market.
The price of gold reached a new record high at the week’s start, with the troy ounce gaining 0.2 percent to $2,627. According to Ricardo Evangelista, senior analyst at ActivTrades, the precious metal has continued to rise following the initiation of the US Federal Reserve’s interest rate easing cycle. Additionally, Antonio Ernesto Di Giacomo, senior market analyst at XS.com, pointed out that gold’s status as a “safe haven” amidst geopolitical and economic uncertainties has contributed to its uptrend.
=== INDEX last +/- % absolute +/- % YTD DJIA 42,124.65 +0.1% 61.29 +11.8% S&P-500 5,718.57 +0.3% 16.02 +19.9% Nasdaq-Comp. 17,974.27 +0.1% 25.95 +19.7% Nasdaq-100 19,852.20 +0.3% 60.71 +18.0% US bonds Term Yield Bp to VT Yield VT +/-Bp YTD 2 years 3.59 -2.0 3.61 -83.5 5 years 3.50 +0.5 3.50 -49.6 7 years 3.62 +1.2 3.61 -35.1 10 years 3.75 +0.6 3.74 -13.4 30 years 4.09 +1.0 4.08 12.1 CURRENCIES last +/- % Mon, 8:00 Fri, 17:15 % YTD EUR/USD 1.1114 -0.4% 1.1163 1.1141 +0.6% EUR/JPY 159.49 -0.7% 160.93 160.93 +2.5% EUR/CHF 0.9413 -0.8% 0.9498 0.9482 +1.5% EUR/GBP 0.8328 -0.6% 0.8383 0.8393 -4.0% USD/JPY 143.51 -0.3% 144.18 144.44 +1.9% GBP/USD 1.3347 +0.2% 1.3316 1.3274 +4.9% USD/CNH (Offshore) 7.0580 +0.2% 7.0472 7.0523 -0.9% Bitcoin BTC/USD 63,287.05 +0.7% 63,707.10 62,923.20 +45.3% CRUDE OIL last VT-Settlement. +/- % +/- USD % YTD WTI/Nymex 70.55 71.00 -0.6% -0.45 -0.1% Brent/ICE 74.00 74.49 -0.7% -0.49 -1.8% GAS VT-Settlement. +/- EUR Dutch TTF 36.185 34.61 +4.6% +1.58 +4.2% METALS last previous day +/- % +/- USD % YTD Gold (Spot) 2,626.62 2,622.14 +0.2% +4.49 +27.4% Silver (Spot) 30.68 31.18 -1.6% -0.49 +29.1% Platinum (Spot) 960.00 979.23 -2.0% -19.23 -3.2% Copper Future 4.30 4.29 +0.1% +0.01 +8.7% YTD based on previous day’s closing price ===
Contact the author: maerkte.de@dowjones.com
DJG/DJN/ros
(END) Dow Jones Newswires
September 23, 2024 16:17 ET (20:17 GMT)
Wall Street’s Weekly Summary: Dow Jones Hits New Heights
NEW YORK (Dow Jones)—Wall Street closed the week with a slight gain, marking a pivotal moment as the Dow Jones Index reached a new record high of 42,190 points. The surge was primarily driven by positive movements in Intel shares, which jumped by 3.3% amid ongoing acquisition talks. Investors referred to the week as a ‘breather’ following the aftermath of last week’s interest rate cut rally. Following the US Federal Reserve’s decision to reduce the key interest rate by half a percentage point, both the Dow Jones Index and the S&P 500 scaled new heights.
Stock Market Performance Overview
| Index | Closing Value | Change (%) | Year-to-Date Change (%) |
|---|---|---|---|
| Dow Jones Industrial Average | 42,124.65 | +0.1% | +11.8% |
| S&P 500 | 5,718.57 | +0.3% | +19.9% |
| Nasdaq Composite | 17,974.27 | +0.1% | +19.7% |
Note: Data is based on latest market updates as of September 23, 2024.
Market Dynamics and Key Drivers
Following the Fed’s rate adjustments, speculation remains about the US economy’s ability to achieve a “soft landing” and whether inflation will stay in check. Recent data from S&P Global indicated a slight slowdown in economic activity, with the composite index for private sector production (covering both industry and services) sliding to 54.4 from 54.6 the preceding month.
According to Samuel Tombs from Pantheon, September’s data illustrates “another sluggish increase in employment,” suggesting a cooling trend in inflation levels. Despite this, the Chicago Fed National Activity Index for August reversed course, climbing to +0.12 from a revised -0.42 in July.
Federal Reserve Insights
Austan Goolsbee, president of the Federal Reserve in Chicago, has advocated for further interest rate cuts, arguing that lower rates are essential for ensuring a “soft landing” for the economy. He noted that while inflation shows signs of decreasing and the labor market weakens, rates remain close to their highest levels in two decades.
Intel’s Continued Ascent
Intel stocks captured attention once more, seeing substantial gains after news broke from Bloomberg that Apollo Global Management is considering an investment of up to $5 billion in the semiconductor giant. Meanwhile, speculation regarding a potential acquisition by Qualcomm surfaced, although industry analysts, including Ruben Roy from Stifel, suggest regulatory hurdles may prevent such a deal from materializing.
Other Significant Stocks
- Tesla: Up 4.9% as Barclays forecasts third-quarter deliveries could hit around 470,000 vehicles, surpassing consensus expectations.
- Boeing: Increased by 2.0% amid new proposals to resolve labor disputes affecting its operations.
Currency and Oil Market Trends
In the forex markets, the dollar index saw a modest increase of 0.1%, while the euro fell 0.4% to $1.1114. This drop followed weaker-than-expected purchasing manager indices from both Germany and France.
Oil Prices and Influences
Oil prices experienced a notable decline, with both WTI and Brent crude dropping by up to 0.7%. This downward movement occurred post-gains, attributed to Iranian President Masoud Pezeshkian’s comments at the United Nations, where he expressed that Iran seeks to avoid a broader Middle East conflict.
Bond Market Movements
The bond market noted a slight increase in yields, with the yield on ten-year bonds rising by 0.6 basis points to 3.75%. Market observers reported that economic data released had minimal impact on bond trading.
Gold’s Record High
The price of gold soared to a new record high, reaching $2,627 per troy ounce, reflecting a 0.2% increase. This rise is attributed to the start of the US Federal Reserve’s interest rate relaxation cycle, along with its historical role as a “safe haven” amidst geopolitical and economic uncertainties.
| Commodity | Price | Change (%) |
|---|---|---|
| Gold (Spot) | $2,626.62 | +0.2% |
| Silver (Spot) | $30.68 | -1.6% |
| WTI Crude | $70.55 | -0.6% |
| Brent Crude | $74.00 | -0.7% |
Note: Market data reflects activity as of September 23, 2024.
