Stocks are mixed as Intel's outlook chills the technology

Stocks fell on Friday after bleak forecasts from Intel and as investors analyzed the key inflation reading seen as an influence on the timing of interest rate cuts.

The S&P 500 (^GSPC) rose above the flat line after Thursday's win that saw the benchmark index close at another record high. The Dow Jones Industrial Average (^DJI) rose 0.2%, or about 80 points, while the Nasdaq Composite (^IXIC) fell 0.1%.

Technology companies led the way lower after Intel's ( INTC ) first-quarter forecasts came in well below Wall Street's expectations, dampening the AI-fueled hopes that helped lift stocks to record highs. Intel shares were down more than 11% early, with peers AMD (AMD) and Nvidia (NVDA) taking a minor hit as well.

However, the release of the December PCE index painted a rosy inflation picture for investors. The “core” PCE rate, a measure of inflation known as the Fed’s preferred measure, fell below 3% year-on-year, the slowest growth rate since March 2021.

This number, combined with an earlier-than-expected estimate of US GDP in the fourth quarter, could reinforce the idea that the US economy is headed for a “soft landing.”

Central bankers are scheduled to meet next week for their first policy meeting this year. They are widely expected to keep interest rates steady. But the recent string of positive economic data will likely prompt them to start cutting interest rates later this year, perhaps as early as March.

Read more: What a pause on federal interest rate hikes means for bank accounts, CDs, loans and credit cards

Meanwhile, investors will be watching Friday's earnings set for more information on the health of US companies and the economy. Colgate-Palmolive ( CL ) is a standout, as is American Express ( AXP ), especially after payment card rival Visa ( V ) gave a tepid outlook for revenue growth.

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Friday, January 26, 2024 at 5:00 PM GMT

Elon Musk's AI startup seeks to raise up to $6 billion: report

Elon Musk is ramping up his efforts to develop artificial intelligence technology beyond his all-electric car company.

According to a new report in Financial Times Published on Friday Musk's AI startup xAI is in talks to raise up to $6 billion at a proposed valuation of $20 billion.

The fundraising effort comes as the technology industry seeks to rapidly develop new AI tools and claim market share in an emerging field believed to revolutionize economic life.

The startup has been attracting investors around the world in recent weeks, including family offices in Hong Kong, according to the report, which cites people familiar with the matter. But the report noted that raising money in a region increasingly controlled by Beijing could raise regulatory issues, as Washington seeks to tighten export controls to limit China's ability to develop advanced technologies.

The report comes as Musk pushed Tesla to give him greater control over the company by enhancing his stake or giving him a new class of super-voting shares. Musk said he was uncomfortable helping Tesla become a leader in artificial intelligence without having more influence over the company's decisions. He has threatened to take his vision for developing artificial intelligence and robotics outside the company if his request for greater influence is not approved.
Friday, January 26, 2024 at 4:41 PM GMT

Stocks are trending in morning trading

Here are some of Yahoo Finance's leading stocks Trend indicators Page during morning trading on Friday:

Intel Corporation (you are K): The chipmaker's shares fell more than 10% on Friday morning after it released first-quarter guidance that fell short of Wall Street expectations. The selling increased even though the company showed an overall beat in fourth-quarter 2023 earnings — reporting revenue of $15.4 billion and adjusted earnings of $0.54 per share.

American Express: (XP): The financial services company rose 8% on Friday after reporting revenue of $15.8 billion, up more than 11% from the same period last year, but slightly below estimates of $15.9 billion. CEO Stephen Squirre told Yahoo Finance Live that the devaluation of the Argentine peso was partly to blame for the loss.

Spirit Airlines (Memorizes): Shares sank as much as 17% on Friday morning after JetBlue (JBLU) The low-cost carrier said It may seek to terminate its merger agreement. JetBlue shares rose more than 2% after the warning, in which the airline said some conditions required by the agreement may not be met.

visa (Fifth): The payment card services company fell 1% after the company reported its first-quarter earnings, revealing $8.6 billion in revenue versus an expected $8.57 billion, representing a year-over-year gain of nearly 9% year-over-year. year. Some analysts pointed to forward guidance as a reason for the stock's decline. The growth in the volume of payments in the United States declined during the quarter, which may indicate an economic slowdown.
Friday, January 26, 2024 at 3:53 PM GMT

Moderate Inflation Reinforces Fed Rate Cut Story 'Not If But When'

The Fed's ongoing public debate over when to start its easing cycle intensified on Friday after the central bank's preferred measure of inflation fell below 3% for the first time since March 2021, ahead of the start of an aggressive interest rate hike campaign.

The personal consumption expenditures (PCE) index rose 2.6% year-on-year in December, in line with last month's reading. The “core” PCE index, which excludes volatile food and energy categories, grew 2.9%, down from 3.2% from the previous month and below the 3.0% that economists surveyed by Bloomberg had expected.

Quincy Crosby, chief global strategist at LPL Financial, said expectations remain that the Fed will discuss “when — not if” it will start cutting interest rates at its next policy meeting.

Markets were widely anticipating that the first interest rate cut would arrive in March. But a number of Federal Reserve officials have disputed this narrative. They have doubled down on their data-driven strategy, abandoning a temporary decision to start easing interest rates in favor of waiting for further confirmation that inflation has been fully tamed.

“Although inflationary pressures continue to normalize with 'core' numbers approaching the Fed's 2% target, the Fed will continue to monitor the impact of strong consumer spending coupled with the promise of fiscal stimulus on igniting a bout of inflation,” Crosby said. . . .

As of Friday morning, traders were anticipating a 47% chance that the Fed would cut interest rates at its March meeting. This number rises to nearly 90% in relation to the possibility of a cut in May.
Friday, January 26, 2024 at 3:00 PM GMT

Spirit shares fall after JetBlue warns that the merger agreement could expire on Sunday

Spirit Airlines (SAVE) shares fell as much as 17% on Friday morning after JetBlue (JBLU) shares The low-cost carrier said The merger agreement may be terminated in January. 28.

JetBlue shares rose more than 2% after the warning, in which the airline said some conditions required by the agreement may not be met. The Long Island City, New York-based company said it continues to evaluate its options under the agreement.

This development reduces the likelihood of Spirit Airlines' $3.8 billion sale to JetBlue (JBLU) going through since a court ruled last week to block the merger over antitrust concerns.

The two companies have since filed a request to appeal the federal judge's ruling.

On Friday morning, Spirit retracted JetBlue's warning, It is useful “There is no basis” for terminating the merger agreement. The airline said it will continue to adhere to the agreement and “expects JetBlue to do the same.”
Friday, January 26, 2024 at 2:37 PM GMT

Shares were mixed in morning trading

Stocks were mixed Friday morning after a bleak outlook from Intel (INTC) and as investors digested the latest upbeat reading on inflation and what it could mean for the timing of the Fed's first interest rate cut of the session.

The S&P 500 (^GSPC) rose 0.1% after Thursday's win that saw the benchmark index close at another record high. The Dow Jones Industrial Average (^DJI) was almost unchanged, while the Nasdaq Composite (^IXIC) fell 0.2%.