The Dow Jones Industrial Average ended at 39,150.33 points, up 0.04%, the S&P 500 stood at 5,464.62 points, losing 0.16%, and the Nasdaq Composite fell 0.18%, closing at 17,689.36 points.
The New York Stock Exchange struggled to find its way on Friday, with stocks showing mixed performance. Nvidia continued its decline after having recently reached its all-time high. In this context, the Dow Jones Industrial Average index ended at 39,150.33 points, up 0.04%, the S&P 500 stood at 5,464.62 points, losing 0.16%, and the Nasdaq Composite fell 0.18%, closing at 17,689.36 points.
Nvidia drops to third place among the most valuable companies
NVIDIA Corporation shares fell more than 4%, toaccumulating losses from the previous day, as investors decided to take profits after the dizzying rise of the chip maker, which briefly overtook Microsoft as the most valuable company on the market.
Nvidia was valued at $3.14 billion in recent trading, slightly below Apple’s $3.23 billion and Microsoft’s $3.33 billion. Despite this setback, which is presumed temporary, the enthusiasm around artificial intelligence applications suggests that demand for Nvidia shares remains strong.
Boeing close to deal to acquire Spirit Aerosystems
Boeing shares rose 0.1% after reports that the company is close to agreeing to buy back Spirit Aerosystems, its former subsidiary, whose shares rose more than 5.5%. Boeing had entered into negotiations to buy back one of its main suppliers, spun off in 2005, but faced difficulties due to Spirit’s work for Airbus, Boeing’s main rival.
The European group had threatened to block any deal that involved Boeing making parts for its new models.
CarMax results and technology concerns
CarMax shares rose 0.3% after its first-quarter earnings beat expectations, despite a 33% drop and missing sales estimates.
Some analysts expressed concern about the significant weight of big technology companies in the market, fearing that investor euphoria around artificial intelligence is part of a bubble that will eventually burst. Jamie Cox, managing partner of Harris Financial Group, told CNBC that the valuations of these companies have deviated so much from the average that an eventual expansion of the market is expected.
Wells Fargo Review
Wells Fargo recommends investors reduce their exposure to overvalued technology stocks, pointing out the insufficient breadth of the market rally, driven mainly by a small number of large technology and communications companies.
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Bankrate
According to their analysts, a handful of tech giants are responsible for the bulk of the S&P 500 index’s gains this year, accounting for nearly 58% of the performance through May 31, 2024. In contrast, the remaining 498 companies contributed little more of 42% to total performance. Wells Fargo suggests cutting overvalued sectors and replacing them with undervalued sectors such as industrials, energy, materials and healthcare.
Surprise in manufacturing and services activity
The second readings of the manufacturing and services purchasing managers’ index for June beat economists’ expectations, highlighting the strength of the economy and reducing the urgency of changing interest rates. Existing home sales data for May also beat economic forecasts.
Source: Ambito
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