February 22, 2024
Finance

Stocks open steady as S&P 500 eyes 5,000 mark


US stocks opened near the flatline on Thursday, hitting pause after hitting fresh record highs, as investors cheered chipmaker Arm’s outlook and looked for fresh impetus in the latest batch of corporate results.

The S&P 500 (^GSPC) slipped almost 0.1%, after the major benchmark closed just a few points shy of hitting 5,000 for the first time ever. The Dow Jones Industrial Average (^DJI) opened just above the flatline, while the tech-heavy Nasdaq (^IXIC) dipped 0.1%.

Stocks have rallied as robust economic data and upbeat earnings have lifted spirits on Wall Street, helping the benchmark S&P 500 close in on the key psychological level. But some investors are questioning whether gains can be sustained, given the concentrated group of megacaps driving them.

Shares in Arm (ARM) soared over 25% in premarket trading, boosting hopes that AI and techs will keep buoying the market. The chipmaker gave a surprisingly bullish forecast based on its expansion into new areas. Also providing cheer, Disney (DIS) shares rose almost 8% as investors welcomed its earnings beat and deals with Taylor Swift and Fortnite maker Epic Games.

Meanwhile, traders have scaled back on bets on a March interest rate cut thanks to a drumbeat of caution from central bank officials. Richmond Fed president Tom Barkin is set to add his comments on Thursday, while the weekly jobless claims report due later could also move the needle on policy expectations given December’s blockbuster jobs report.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

Elsewhere, worries about deflation in China reignited as data showed consumer prices in the world’s second-biggest economy fell by the most since 2009 amid the global financial crisis.

Also on the downbeat side, Danish shipping giant Maersk’s (AMKBY) warning about a freight slowdown rattled investors. Its shares slumped 15% after the company said it will suspend share buybacks.

Live2 updates

  • Oil gains 2% on Middle East tensions, lower US production forecast

    Crude futures opened higher on Thursday after the US killed a militant commander in Iraq and Israeli rejected a Hamas ceasefire proposal.

    West Texas intermediate (CL=F) gained about 2% trading above $75 per barrel, while Brent futures (BZ=F) also rose by about the same amount to hover above $80 per barrel.

    “The geopolitical Red Sea risk is returning to crude,” said Dennis Kissler, senior vice president at BOK Financial.

    Houthi rebels in support of Palestinians have been targeting attacks on vessels, prompting major cargo companies to avoid the Red Sea region that connects to the Suez canal, a critical pathway between Asia and Europe.

    Recent data from the Energy Information Administration (EIA) showed draws in both distillates and gasoline inventories. The sharp decline signals higher demand, helping maintain upside pressure on crude prices.

    The EIA also cut its domestic output forecast for 2024, forecasting it would not reach the record levels of December 2023 until February 2025.

  • Stocks little changed as S&P nears 5,000 landmark

    Stocks opened near the flatline on Thursday after hitting a fresh record high in the prior session.

    The S&P 500 (^GSPC) slipped almost 0.1%, after the major benchmark closed just a few points shy of the 5,000 level for the first time ever.

    The Dow Jones Industrial Average (^DJI) opened slightly higher, while the tech-heavy Nasdaq (^IXIC) hugged the flatline.

    Disney (DIS) stock rose as much as % after the company reported narrower-than-expected losses in its entertainment division.

    The entertainment company also announced its new over-the-top (OTT) ESPN streaming service will launch in fall 2025.



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