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Financial-Markets 09/19 15:43
NEW YORK (AP) -- Wall Street tacked on some more gains Friday as it glided
to the finish of its latest record-setting week.
The S&P 500 rose 0.5% to close out its sixth winning week in the last seven.
The Dow Jones Industrial Average added 172 points, or 0.4%, and the Nasdaq
composite climbed 0.7%.
All three hit all-time highs for a second straight day. They've been
rallying on expectations that the Federal Reserve will continue to cut interest
rates in order to give the economy a boost after the central bank lowered them
for the first time this year on Wednesday.
FedEx helped lift the market after delivering stronger profit and revenue
for the latest quarter than analysts expected. It rose 2.3%, thanks in part to
strength for its domestic package business.
Newmont rallied 4.3% after the gold miner sold its investment in Canada's
Orla Mining for $439 million. It added to a stellar run, and Newmont's stock
has more than doubled so far this year as the price of gold has shot to records.
Gold has benefited from expectations for lower interest rates, along with
worries about high inflation and the potential that mountains of debt for the
U.S. and other governments could make their currencies worth less.
On the losing end of Wall Street was Lennar, which dropped 4.2% after the
homebuilder reported weaker revenue for its latest quarter than analysts
expected.
Executive Chairman Stuart Miller pointed to "the continued pressures of
today's housing market" and said Lennar had to offer additional incentives to
entice customers to buy homes, which dragged down the average sales price.
All told, the S&P 500 rose 32.40 points to 6,664.36. The Dow Jones
Industrial Average added 172.85 to 46,315.27, and the Nasdaq composite climbed
160.75 to 22,631.48.
If the Fed does keep cutting interest rates, that could give the struggling
housing market a boost, and mortgage rates have already come down in
expectation of a rate-cutting campaign.
Lower rates could likewise tamp down widespread criticism that the U.S.
stock market has become too expensive after prices rose so quickly. But
expectations have grown so strong for coming cuts to rates that the stock
market may be set for a sharp drop if the Fed does not cut as much as traders
expect.
Fed officials did indicate earlier this week that they're likely to deliver
more cuts to rates this year and next. They're hoping to give support to the
job market, which has slowed and made it more difficult for U.S. workers to
find new positions.
But Fed Chair Jerome Powell also warned Wednesday that the central bank is
in a precarious position and may have to change course quickly. That's because
the economy is in an unusual situation where inflation is remaining stubbornly
high at the same time that the job market is slowing. And President Donald
Trump's tariffs are threatening to push inflation higher, at least temporarily.
The Fed is in charge of fixing both high inflation and a weak job market,
but it has only one tool to do so. And helping one by moving interest rates
often hurts the other in the short term.
Scott Wren, senior global market strategist at Wells Fargo Investment
Institute, warned that the stock market could become shakier following its
recent glide to records as "the economy slows, tariff impacts arrive piecemeal
and political uncertainties continue."
In stock markets abroad, indexes mostly ticked lower in Europe and Asia.
Japan's Nikkei 225 fell 0.6% after the Bank of Japan said it will sell some
of its massive trove of Japanese stock funds. It also held interest rates
steady.
Chinese indexes finished mixed ahead of a phone call between Trump and
China's President Xi Jinping. After the call ended, the U.S. president called
it productive. The leaders of the world's two largest economies agreed to meet
at a regional summit taking place in South Korea at the end of October.
In the bond market, Treasury yields held relatively steady. The yield on the
10-year Treasury edged up to 4.12% from 4.11% late Thursday.
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AP Writers Matt Ott and Teresa Cerojano contributed.
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