Equities Finish Flat, but Dow Achieves Record in Strong Week – Reuters

By Chuck Mikolajczak

NEW YORK (Reuters) – U.S. stocks ended nearly flat on Friday as investors took a breather following a strong rally the previous day that was driven by an increased interest-rate cut by the Federal Reserve. Notably, gains in a prominent sports apparel company helped the Dow reach a new record.

After experiencing their largest daily percentage increases since mid-August, major stock averages were largely subdued during the session but still managed to secure weekly gains of at least 1%.

Stocks briefly recovered from losses after comments from Fed Governor Christopher Waller raised expectations of a 50 basis point rate cut at the November meeting, following a 50 basis point cut on Wednesday. In contrast, Governor Michelle Bowman expressed a preference for a smaller reduction this week.

"The market is still trying to adjust because while some investors may have anticipated a 50 basis point cut, many did not," noted Sid Vaidya, U.S. chief wealth strategist at TD Wealth in New York. He added, "It’s important to be more selective and cautious since growth is expected to slow and valuations, particularly in large-cap growth stocks, are somewhat stretched."

The Dow rose 38.17 points, or 0.09%, to 42,063.36, while the S&P 500 lost 11.09 points, or 0.19%, to 5,702.55, and the Nasdaq declined 65.66 points, or 0.36%, to 17,948.32.

For the week, the S&P 500 gained 1.36%, the Nasdaq increased by 1.49%, and the Dow climbed 1.62%.

Markets are currently pricing in a cut of at least 25 basis points in November, with nearly a 49% chance for a 50 basis point cut, according to market analysis.

In sector performance, utilities surged by 2.69% to a record high, leading the 11 major S&P sectors, driven by a 22.29% jump in shares of a major energy company following its data-center partnership with a tech giant to revitalize a unit of a Pennsylvania nuclear facility.

Additionally, the Dow received support from a technology firm, whose shares increased by 3.31% after reports of a potential acquisition approach.

The Federal Reserve initiated its monetary easing cycle earlier this week, projecting a period of steady economic growth, low unemployment, and contained inflation.

Meanwhile, a logistics company saw its shares plunge by 15.23% after it lowered its full-year revenue forecast, causing the Dow Jones Transport index to drop 3.53%, marking its largest daily decline since late April 2023.

A notable sports brand rose by 6.84% after announcing the return of a former senior executive to succeed the current CEO.

The simultaneous expiration of options and futures related to stock indices and individual stocks, known as "triple witching," contributed to one of the heaviest trading-volume days of the year.

Historically, stocks tend to perform well during periods of interest rate cuts. However, the current outlook is mixed, with the S&P 500’s valuations significantly above its long-term average.

Declining stocks outnumbered advancing ones by a ratio of 1.66 to 1 on the NYSE and by 1.87 to 1 on the Nasdaq.

The S&P 500 saw 32 new 52-week highs and one new low, while the Nasdaq Composite recorded 114 new highs and 105 new lows.

Total volume on U.S. exchanges reached 19.97 billion shares, significantly higher than the average of 11.48 billion shares over the last 20 trading days.