The Dow Jones Industrial Average finished higher Friday to extend its winning streak to eight straight sessions, as major stock indexes gained ground for the third consecutive week.
The Dow added 0.3% and has gained 4.5% over the winning stretch, it's longest since a nine-day run in early December. The Dow is now 0.7% away from its all-time closing high set in late March. The gained 0.2% on Friday, while the Nasdaq Composite fell less than 0.1%.
Investor sentiment has been supported over the past week by the strength of earnings reports and optimism that favorable economic data could prompt the Federal Reserve to consider cutting interest rates. There was little in the way of significant economic data this week, and most of the reports that were released reinforced the idea that inflationary pressure could be easing, which is exactly what the Fed needs to see before cutting its benchmark rate.
On Friday morning, however, the University of Michigan’s consumer sentiment index showed a sharp decline in sentiment as inflation expectations deteriorated. Fed officials closely watch surveys that show consumers' expectations for future price increases.
Among the big movers Friday, Taiwan Semiconductor (TSM), the world's biggest chip manufacturer, rose 4.5% after reporting a surge in sales for April, driven by demand for artificial intelligence.
Akamai Technologies (AKAM) was among the big decliners, down 11% after the software infrastructure company issued disappointing guidance.
Among the Dow's leading gainers, McDonald's (MCD) and 3M (MMM) gained 2.6% and 1.6%, respectively.
The yield on 10-year Treasurys increased to 4.5%, after sliding to around 4.45% Thursday amid the hopes for interest rate cuts. Gold futures were up 1.3% to $2,370.
S&P Movers on Friday
May 10, 2024 05:04 PM EDT
GAINS
Mettler Toledo (MTD) led gains among S&P 500 stocks Friday, soaring 17% following a strong quarterly earnings report. The manufacturer of scales and other precision instruments topped sales and profit estimates, boosted by an improvement in its laboratory segment as well as momentum in Europe and the Americas.
Gen Digital (GEN) jumped 15.3% after the cybersecurity software firm reported better-than-expected revenue andearnings per sharefor its fiscal fourth quarter. Profit drivers included spending discipline andsynergiesfrom the 2022 merger between NortonLifeLock and Avast that formed the basis for Gen Digital.
Arista Networks (ANET) advanced 6.1%, extending gains from earlier this week after the cloud networking companytopped quarterly estimates, issued an upbeat outlook, and announced a $1.2 billion share repurchase plan. As the use ofartificial intelligence (AI)expands, Arista suggested it's seeing strong demand for networking solutions that connect cloud and data center infrastructure.
LOSSES
Akamai Technologies (AKAM) posted the weakest daily performance in the S&P 500 Friday, tumbling 11% after the software infrastructure firm issuedweaker-than-expected sales and profit guidancefor the current quarter and the full year. The provider of content delivery services noted that dollar strength, cost rationalization by a large social media customer, and slowing traffic growth in the industry could weigh on its results.
Insulet (PODD), which manufactures insulin management systems for patients with diabetes, lost 6.6% in the wake of the company's first-quarter earnings report. Although revenue for the period exceeded expectations, EPS fell short of forecasts. Unfavorable impacts from foreign currency exchange and wholesalers reducing inventory ahead of new product launches could weigh on Insulet's performance in the current quarter, the company indicated.
Moderna (MRNA) said the Food and Drug Administration (FDA)pushed back its approval decisionfor the biotech firm's respiratory syncytial virus (RSV) vaccine. The company now expects a decision from the regulator by the end of May. Moderna shares slipped 4.4% following the news.
-Michael Bromberg
What to Expect From Next Week's CPI Inflation Report
May 10, 2024 03:27 PM EDT
The calendar for economic data has been light the past several days, but that's going to change significantly next week.
The big data release of the week will be Wednesday's consumer price index for April. Inflation likely stayed higher than Fed officials would like, if early forecasts are correct.
The CPI likely rose 3.4% over the year in April, down from a 3.5% increase in March according to a consensus estimate by forecasters tracked by Bloomberg, cited by Wells Fargo Securities. The Cleveland Fed's “nowcast,” which projects the CPI based on economic data as it comes in, called for a 3.5% annual increase as of Friday.
Either would be well above the Federal Reserve’s goal of a 2% annual inflation rate.
Read more here about what to expect from next week's key inflation data release.
-Diccon Hyatt
Moderna Falls as FDA Delays RSV Vaccine Approval
May 10, 2024 01:53 PM EDT
Moderna (MRNA) slid 4% as the biotech’s effort to move beyond just a COVID-19 vaccine was stalled somewhat by U.S. regulators looking at its new shot to treat respiratory syncytial virus.
Moderna said that theFood and Drug Administration (FDA)has advised the company that it does not expect to complete its review of the vaccine, known as mRNA-1345, until the end of the month. Previously, it was expected officials would approve it on May 12.
The company noted that the FDA did not inform it of “any issues related to vaccine safety, efficacy or quality that would prevent the approval.”
With the end of the pandemic, Moderna has moved to use its mRNA technology to create vaccines forother diseases. Along with RSV, the company has been working on developing a combination shot that works for both COVID-19 and the flu, and acancer-fighting treatmentto be used along with Merck’s (MRK) blockbuster drug Keytruda.
-Bill McColl
SoundHound Jumps on Growing Demand for Voice AI Tools
May 10, 2024 01:19 PM EDT
SoundHound AI (SOUN) surged 10% after the company topped quarterlyrevenueestimates and upped its full-year sales guidance amid growing demand forartificial intelligence speech recognition software.
The company already has a number of partnerships across restaurants and automobile sectors for its voice AI assistant tools. Its clients include Dine Brand's (DIN) Applebees that has rolled out use of SoundHound's technology at its franchises. The company also has deals with Stellantis (STLA) and an unnamed U.S.-based EV maker for in-vehicle integrations of its voice AI tools.
Separately, the company announced Thursday it has partnered with AI-powered answer engine company Perplexity to bringlarge language model (LLM)capabilities to its voice assistant technology.
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Soundhound shares have more than doubled since the start of 2024, getting a boost from news earlier this year that AI investor darling Nvidia had acquired shares in the company.
-Timothy Smith
TSMC Surges As Sales Jump on AI Demand
May 10, 2024 12:56 PM EDT
Shares of Taiwan Semiconductor Manufacturing Co. (TSM) rose 5% and were near their all-time high Friday as the chipmaker’s sales skyrocketed last month on soaring demand for semiconductors used forAI applications.
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TSMC, which supplies more than half the world’s chips, including for tech giants Apple (AAPL) and Nvidia (NVDA), said April sales jumped 60% from a year ago.
Earlier this week, U.S. Commerce Secretary Gina Raimondo addressed concerns about a potential invasion of Taiwan by China. She told a House hearing that China seizing TSMC would be “absolutely devastating” to the U.S. economy. Raimondo pointed out that the U.S. buys 92% of its leading-edge semiconductors from TSMC.
Last month, the Commerce Department announced aCHIPS and Science Actgrant of$6.6 billionand up to $5 billion in low-cost government loans to TSMC to build a second manufacturing plant in Arizona. The company then added that it would boost its planned investment to more than $65 billion and construct a third plant in the state.
-Bill McColl
Dow Lagging S&P 500 and Nasdaq in 2024
May 10, 2024 09:35 AM EDT
Even with its seven-session winning streak, the Dow's gains so far this year are about half those of the S&P 500 and Nasdaq Composite. The Dow was near unchanged for the year before the streak began at the start of this month.
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Akamai Slides on Disappointing Guidance
May 10, 2024 09:03 AM EDT
Akamai Technologies(AKAM) fell sharply in premarket trading Friday after the software infrastructure company's current-quarter and full-year guidance came in below Street expectations.
The company said its outlook reflects a stronger dollar, a large social media customer rationalizing costs, and slowing traffic growth across the industry.
Since topping out at over $129 in early February, Akamai shares have undergone a significantcorrection, falling around 20% in the past three months. Moreover, the50-day moving average crossed below the 200-day MA in late April to form an ominousdeath cross, a chart pattern technical analysts interpret as marking the start of a new downtrend.
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Investors should monitor an area on the chart between $89 and $94, where the price may find buying interest in azone of supportfrom prior price action between November 2022 to August last year.
Akamai shares were down 8.3% at $93.95 at around 9:00 a.m. ET.
-Timothy Smith
Major Stock Indexes Are Higher Friday
May 10, 2024 08:19 AM EDT
Futures contracts connected to the Dow Jones Industrial Average were up 0.2%.
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S&P 500 futures were up 0.3%.
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Nasdaq 100 futures were up 0.4% at around 8:00 a.m. ET.
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