Stocks are near their records in large part on the belief that the US economy will indeed continue to grow, now that the Federal Reserve is cutting interest rates to give it more juice. The Fed last month lowered its main interest rate for the first time in more than four years and indicated more cuts will arrive through next year.
The yield on the 10-year Treasury rose to 3.78 per cent from 3.73 per cent late Tuesday. The two-year yield, which more closely follows expectations for what the Fed will do with overnight interest rates, rose to 3.64 per cent from 3.61 per cent.
Traders are shifting their expectations for the Fed’s next move on rates toward a traditional-sized cut of a quarter of a percentage point, according to data from CME Group. Last week, more traders were betting on a larger cut of half a percentage point.
On Wall Street, Caesars Entertainment jumped 5.4 per cent for the biggest gain in the S&P 500. The casino owner said it approved a new program to deliver up to $US500 million ($727 million) to shareholders by buying back more of its stock.
Ciena climbed 7.3 per cent after the networking company announced its own program to buy back up to $US1 billion of its stock.
Exxon Mobil rose 0.3 per cent as crude prices continued to rise, bringing its gain for the week to 3.9 per cent.
Humana tumbled 12 per cent after the insurer warned a drop in its quality ratings for Medicare Advantage could mean a hit to its revenue in 2026. Humana said it believes there may be errors in the Centres for Medicare and Medicaid Services’ calculations, and it is trying to challenge the ratings.
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Nike sank 6.3 per cent even though the athletic giant reported stronger profit for the latest quarter than analysts expected. Its revenue fell short of forecasts, and the slump shows how much work incoming CEO Elliott Hill has in making the brand cool among customers. Nike also pulled its forecast for full-year financial results and postponed its investors day conference.
Conagra Brands fell 8.3 per cent after the company behind Duncan Hines and Reddi-wip reported weaker profit than analysts expected. It said temporary manufacturing disruptions at its Hebrew National business during prime grilling season hurt its results.
Tesla sank 3.3 per cent despite reporting an increase in its deliveries of electric vehicles during the latest quarter, the first time that’s happened this year. The number topped analysts’ forecasts, but investors may have been expecting an even bigger increase.
In stock markets abroad, Hong Kong’s Hang Seng roared 6.2 per cent higher, riding a wave of investor enthusiasm over recent announcements from Beijing to rev up the Chinese economy. With Shanghai and other markets in China closed for a holiday, trading crowded into Hong Kong.
Japan’s Nikkei 225 lost 2.2 per cent to continue its sharp swings, while indexes in Europe were mixed.
AP
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