Wall Street closes mixed, stocks remain positive for the week

New York (AFP) – The New York Stock Exchange ended mixed on Friday, digesting both a disappointing outlook in the semiconductor sector and positive inflation news ahead of a crucial week with the Fed meeting

The Dow Jones index gained 0.16% to 38,109.43 points, the technology-dominated Nasdaq lost 0.36% to 15,455.36 points and the S&P 500 -0.07% to 4,890.97 points.

Despite this modest slowdown, Wall Street concluded with a weekly gain thanks to the records set in recent sessions.

The broader S&P 500 index, the most representative of the market, gained almost 0.80% over the week.

“We had a mixed market today with Intel’s announcements which obviously weighed on the Nasdaq,” noted Peter Cardillo of Spartan Capital.

The microprocessor giant dropped 11.91% to $43.65 after reporting lower-than-expected forecasts for the current quarter. Intel said it now expects 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 (-1.71%), Nvidia (-0.95%), Broadcom (-2.04%) and Qualcomm (-2.43%) to fall.

Shortly before the opening of the session, the Commerce Department published inflation figures in the United States, measured by the PCE index, the favorite tool of the Federal Reserve (Fed) to gauge the evolution of price.

The price increase remained at 2.6% in December year-on-year. Over one month, however, it started to rise again, with prices increasing by 0.2% compared to November, as expected. But excluding food and energy, so-called “underlying” inflation fell to 2.9%, its lowest level in almost three years.

“We have had good news on the inflation side which is moving in the right direction,” noted Mr. Cardillo interviewed by AFP. “But we also had signs of strong consumption which scared the bond market and yields rose,” he added.

Household spending (+0.7%) actually increased faster than their income (+0.3%) in December.

Reacting to this consumer trend which risks delaying the Fed rate cuts expected this year by investors, ten-year bond yields climbed to 4.15% instead of 4.11% the day before.

While the Monetary Committee of the American central bank will make a decision on Wednesday, “the tone of the Fed’s message will remain semi-strict”, estimates Peter Cardillo.

“His message will be to say that if inflation is going in the right direction, it is still too early to claim victory, which pushes back any hope of rate cuts to the second half of the year,” said the analsyt.

Next week will also be heavy on corporate news with the results of Apple (-0.90%) and Microsoft (-0.23%), the two largest capitalizations on the market. Microsoft, which on Thursday had briefly exceeded $3,000 billion in capitalization, announced the layoff of 1,900 employees from its Xbox console subsidiaries and Activision Blizzard.

The quarterly accounts of Alphabet (+0.10%), Amazon (+0.87%) and Meta (+0.24%) are also expected.

On the macroeconomic front, the jobs report for January will be released on Friday.

Among other values, Salesforce, the customer relations software group which is part of the Dow Jones, gained 0.32% while the company was preparing to cut 700 jobs, according to the Wall Street Journal, or 1% of its global workforce.

Benefiting from consumer enthusiasm, the credit card company American Express soared 7%, also driven by a 27% jump in its quarterly earnings per share and the forecast of an increase in its turnover. business from 9% to 11% in 2024, in the upper range of analyst projections.

Its competitor Visa fell 1.72% after reporting a slowdown in the growth of payment transactions in January.

The manufacturer of toothpaste and hygiene and household products Colgate-Palmolive kept smiling (+1.97%) after financial performance above market expectations in the fourth quarter, anticipating the maintenance of this “growth dynamic” in 2024 and beyond.