Wall Street ended mostly higher on Friday, with the S&P 500 closing at a record high and the Dow extending its gains as the U.S. government shutdown entered its third day. The Nasdaq ended slightly lower.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 0.5% or 238.56 points, to end at 46,758.28 points.
The S&P 500 finished little changed, rising less than 0.1%%, or 0.44 points, to close at 6,715.79 points. Healthcare and utility stocks were the biggest gainers.
The Health Care Select Sector SPDR (XLV) added 1.1%, while the Utilities Select Sector SPDR (XLU) rose 1.2%. Nine of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq declined 0.3%, or 63.54, to finish at 22,780.51.
The fear gauge, CBOE Volatility Index (VIX), climbed 0.12% to 16.65. Advancers outnumbered decliners on the NYSE by a 1.72-to-1 ratio. On the Nasdaq, a 1.5-to-1 ratio favored advancing issues. A total of 20.47 billion shares were traded on Friday, higher than the last 20-session average of 19.01 billion.
On the Nasdaq, there were 2,813 new highs and 1,880 new lows. On the NYSE, there were 686 new highs and 55 new lows.
Tech Stocks Tumble, Government Shutdown Continues
Markets opened on a positive note on Friday, but by afternoon, tech stocks dragged down the S&P 500 and the Nasdaq. A decline in shares of big tech companies weighed on the broader market.
Shares of Palantir Technologies Inc. (PLTR) declined 7.5%, while Tesla, Inc. (TSLA) ended 1.4% lower. Shares of NVIDIA Corporation (NVDA) finished 0.7% lower. Palantir Technologies has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This came as the government shutdown entered its third day. Investors have so far tried to overlook the government shutdown and have avoided getting impacted by the ongoing situation. However, a shutdown for a longer period could pose challenges for Federal officials and raise concerns for investors.
While government shutdowns are historically short-lived, investors have been concerned about inflation, which is still high, and a shrinking labor market that poses a threat to the economy’s health. The Federal Reserve cut interest rates by 25 basis points for the first time this year in September and has hinted at two more quarter-point rate cuts by the year-end.
While this has raised hope among investors, the Federal Reserve has also said that inflation and jobs data need to be balanced before any rate cut.
The government shutdown also stalled the release of the key nonfarm payrolls data for September on Friday. However, labor market concerns prevail despite the shutdown, as private payrolls data released earlier in the week showed its worst decline since March 2023.
Economic Data
The only other economic data released on Friday was the Institute for Supply Management’s Services Index. The ISM Services PMI came up with a reading of 50%. The services sector declined for the fourth straight month and reached a breakeven point between expansion and contraction for the first time since January 2010.
Weekly Roundup
Despite a volatile trading session, all three major indexes scored a winning week. The Dow added 1.1% for the week, the S&P 500 gained 1.1%, and the Nasdaq ended 1.3% higher.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report Palantir Technologies Inc. (PLTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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