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Financial Markets 09/13 09:50
NEW YORK (AP) -- U.S. stocks are rising closer to their records Friday as
they finish out their fourth winning week in the last five.
The S&P 500 was 0.5% higher in morning trading and just 0.7% below its
all-time high set in July. It's roared to claw back almost all its losses from
last week, which was its worst in nearly 18 months.
The Dow Jones Industrial Average was up 295 points, or 0.7%, as of 10:15
a.m. Eastern time, and the Nasdaq composite was 0.5% higher.
Technology stocks have been the market's main drivers this week,
particularly Nvidia and other big technology stocks that struggled earlier this
summer on concerns their prices had shot too high in the frenzy around
artificial intelligence.
Tech giant Oracle helped drive Friday's gains after giving long-term
financial forecasts that analysts said topped their expectations. The software
company climbed 2% to cap a strong week that began with a better-than-expected
profit report for the latest quarter. Oracle is on pace for a 16% gain for the
week and potentially its best such performance in more than two decades.
Stocks were also getting support from the bond market, where Treasury yields
were easing ahead of next week's meeting of the Federal Reserve. The consensus
expectation is that the Fed will deliver the first cut to interest rates in
more than four years on Wednesday.
Inflation has slowed from its peak two summers ago, which is encouraging the
Federal Reserve to turn more focus to the slowing job market and economy. It
has been keeping its federal funds rate at a two-decade high for more than a
year.
How much to cut rates by will be a delicate balancing act for the Fed:
Lowering them rates can relieve pressure on the economy, but that can also give
inflation more fuel. Reports earlier this week showed some underlying upward
pressure may remain on inflation, which initially pushed traders to ratchet
back expectations for the size of the Fed's move next week.
On Friday, though, traders were seeing nearly a coin flip's chance that the
Fed could deliver a large cut of half of a percentage point, instead of the
more traditional quarter of a point, according to data from CME Group. The
federal funds rate is currently sitting in range of 5.25% to 5.50%.
The yield on the 10-year Treasury eased to 3.66% from 3.68% late Thursday.
The two-year yield, which more closely tracks expectations for Fed action, fell
to 3.59% from 3.65%.
On Wall Street, home-furnishings company RH jumped 22.6% after reporting
stronger profit and revenue for the latest quarter than expected. The company
said demand has been gaining momentum each month "despite operating in the most
challenging housing market in three decades."
The housing market has been contending with high mortgage rates, though
they've been easing since the spring with Treasury yields on expectations for
coming rate cuts. Shoppers generally have also been ground down by high prices
across the economy, though a preliminary reading on U.S. consumer sentiment on
Friday came in better than economists expected.
Uber Technologies revved 6.8% higher after it said it will bring autonomous
ride-hailing to Austin and Atlanta with Waymo early next year.
They helped offset a 2% drop for Boeing, as aircraft assembly workers walked
off the job early Friday. Union members voted overwhelmingly to go on strike
and reject the troubled aerospace giant's tentative contract that would have
increased wages by 25% over four years.
Adobe fell 8.9%, even though the company also reported better profit for the
latest quarter than expected. Analysts said investors were more focused on its
financial forecasts for the current quarter, where some trends looked to be
falling short of expectations.
In stock markets abroad, indexes were higher in Europe after finishing mixed
in Asia.
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AP Writers Matt Ott and Zimo Zhong contributed.
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