US stocks sank Friday as the major indexes failed early on to build on a Thursday rally and finished with losing weeks.
The S&P 500 (^GSPC) finished down 1.2%, while the Dow Jones Industrial Average (^DJI) slumped by 0.8%, or almost 300 points. The tech-heavy Nasdaq Composite (^IXIC) plunged 1.6%, leading the way down.
The moves Friday came as China reported that its economy picked up steam last month, easing concerns about the world's second-largest economy. In the US, the United Auto Workers union officially launched a historic strike at select Big Three automaker plants.
The Wall Street benchmarks rallied on Thursday, after retail sales and wholesale price inflation for August came in hotter than expected. Those signs of resilience in the US consumer and of persistent price pressures make a case for more Fed rate hikes. The central bank will meet next week, as 97% of bets are currently on the committee holding interest rates at current levels, according to the CME Group's FedWatch tool.
New data on Friday painted a better picture for the Fed, with the University of Michigan's consumer survey showing that consumers' short-term inflation expectations had moved down to lows not seen in more than two years.
A recent oil price rally has spurred the rises in inflation, with a significant effect on stocks. On Friday, WTI crude (CL=F) and Brent (BZ=F) futures stayed near the 2023 highs hit on Thursday.
In individual stock moves, all eyes continued to be on British chipmaker Arm (ARM), which debuted on public markets on Thursday with a near-25% rise. Arm stock gave up early gains to finish more than 4% lower.
Wall Street backtracked on Friday giving up nearly all of the week’s gains as a degree of caution set in ahead of the Fed’s policy meeting on Tuesday and Wednesday.
The S&P 500 (^GSPC) fell 1.2%, while the Dow Jones Industrial Average (^DJI) decreased by 0.8% or nearly 300 points. The tech-heavy Nasdaq Composite (^IXIC) lost about 1.6%. While all three major indexes closed the day in the negative, the Dow was able to cling onto slight gains for the week, while the S&P and the Nasdaq posted losers.
Sticker shock has forced many homebuyers to walk away from signing on the dotted line.
The rate of pending home sales that fell through has reached the highest percentage in nearly a year, according to an analysis by Redfin published Friday, highlighting the immense financial pressure that buyers are under as they face both elevated interest rates and home prices.
“I’ve seen more homebuyers cancel deals in the last six months than I’ve seen at any point during my 24 years of working in real estate,” said Jaime Moore, a Redfin Premier real estate agent in Reno, NV. “Buyers get sticker shock when they see their high rate on paper alongside extra expenses for maintenance, repairs and closing costs. Many of them would rather back out, even if it means losing their earnest money.”
Nearly 60,000 home-purchase agreements fell out of contract in August, the data showed, an amount equal to nearly 16% of homes that successfully changed hands during the same month. The cancellations were up from 14.3% a year ago and registered the highest percentage of failed deals since October 2022, when mortgage rates surpassed 7% for the first time in two decades, Redfin said.
The average rate on the 30-year fixed mortgage increased to 7.18% this week, up from 7.12% the week prior, according to Freddie Mac. Rates have exceeded 7% for five straight weeks, and it is likely they will remain elevated in the short term as the market braces for the next Fed policy meeting next week.
The median home price in the US is $420,846, according to Redfin’s August data, up 3% compared to last year.
The number of companies that offer student loan repayments as part of their benefits package has doubled over the past year, according to Handshake, the early career and graduate recruitment platform.
“Financial stability is the primary factor that the class of 2024 is really looking at as they think about where they want to go, how they want to start their career,” Handshake Chief Education Strategy Officer Christina Cruzvergara told Yahoo Finance Live. “Student loan repayment is a big piece of that.”
How employers actually contribute to the repayments depends on the company. Some firms will agree to pay a portion of the monthly loan payment after the employee serves a minimum number of years in their role. Other companies will help pay off the remaining debt of their employee. And still others have set up a matching program, similar to 401(k), where they contribute funds that match what their employees pay.
Nearly 70% of 2024 graduates said their student loans will influence what job they take after leaving school, according to a recent Handshake survey. Some students will be on the hook for a monthly payment of as much as $1,000.
Of the companies that offer student loan repayment benefits, the healthcare sector comes in at the top of the list, according to mentions in their job listings, Cruzvergara said, followed by nonprofits and the government. Google, Adidas, Chegg and Estee Lauder are among the employers dangling loan repayment perks.
Here are some of the stocks leading Yahoo Finance’s trending tickers page in afternoon trading on Friday:
Planet Fitness (PLNT): The gym franchise fell nearly 15% Friday afternoon following an announcement that CEO Chris Rondeau had stepped down from the company.
Charles Schwab (SCHW): Shares fell 3% after the financial services company announced a drop in core net new assets. Schwab attributed the declines to the temporary attrition of TD Ameritrade clients and advisors. Schwab bought TD Ameritrade in 2020. The stock took a major hit earlier this year after reporting a significant drop in customer deposits following the collapse of Silicon Valley Bank.
ARM (ARM): Following a blockbuster IPO that lifted shares 24%, the semiconductor and software design company added another 0.6% Friday.
Ford Motor Company (F): Shares of the car maker gained 0.1% on Friday after the United Auto Workers (UAW) union said it will strike at Big Three automaker plants. Shares of Stellantis (STLA) rose 2% while General Motors (GM) increased 1%. The union said it will implement a “stand up” strategy in which workers will not strike all Big Three company plants at once but will call on select local UAW chapters to walk out at designated times.
Shares of Planet Fitness fell by 12% Friday after the gym franchise announced that CEO Chris Rondeau had stepped down.
“As we enter the next chapter of Planet Fitness’ journey, the Board felt that now was the right time to transition leadership,” Stephen Spinelli, Jr., the board’s chairman, said in a release announcing the departure. Rondeau had been a 30-year veteran with the company.
Six-year board member Craig Benson was named interim CEO, effective immediately. Benson previously served as the governor of New Hampshire and is a franchisee of both Planet Fitness and Dunkin’ Donuts. The company said it is considering candidates both inside and outside of the company.
Planet Fitness is the latest company to shake up its C-suite, and it’s something Wall Street isn’t taking lightly, reports Yahoo Finance’s Brooke DiPalma.
While the company did not give a reason for Rondeau’s immediate departure, he was credited with growing the fitness center’s membership by over five-and-a-half times to 18.4 million members and its footprint by four times to more than 2,400 stores.
He also nearly quintupled revenue to a projected $1 billion-plus this year, from $200 million in 2013, and took the company public in 2015, William Blair analyst Sharon Zackfia said in a note. Since the company’s IPO, shares have more than tripled.
Wall Street lost steam during the afternoon trading session on Friday, as the major indexes retreated from their gains on Thursday with investors looking to next week’s Fed policy meeting.
The S&P 500 (^GSPC) fell about 0.8%, while the Dow Jones Industrial Average (^DJI) decreased by 0.5% or about 175 points. The tech-heavy Nasdaq Composite (^IXIC) lost more than 1%, leading the averages on their way down.
The latest round of data from China offered market watchers some reassurance as the economy showed signs of improvement during the August summer travel boom, registering a boost to consumer spending and industrial production.
Retail sales rose more than expected, increasing 4.6% in August compared to last year, a jump from the 2.5% addition in July. Unemployment also improved slightly in August, edging down to 5.2% compared to 5.3% in July. Labor market conditions have received heightened attention after youth unemployment notched a record high earlier this summer only for the Chinese government to stop sharing that data last month.
Friday’s positive economic snapshot follows months of unease about the world’s second largest economy, which has struggled to regain its footing following stringent and prolonged covid lockdown measures. China’s troubles were punctuated in July, when consumer prices tipped into deflationary territory for the first time in two years. The housing market faces a protracted slump, prompting the government to drop interest rates and loosen borrowing requirements to stave off a crisis. Roughly one-quarter of the country’s GDP is tied to housing.
While several economic measures flashed signs of positive momentum, investment in real estate fell nearly 9% in August compared to last year. How Beijing attempts to revive the housing market and reignite growth will be closely watching in the months ahead.
Here are some of the stocks leading Yahoo Finance’s trending tickers page in morning trading on Friday:
ARM (ARM): Following a blockbuster IPO that lifted shares 24%, the semiconductor and software design company retreated some, losing 2% Friday morning.
Ford Motor Company (F): Shares of the car maker lost 0.5% on Friday after the United Auto Workers (UAW) union said it will strike at Big Three automaker plants. Shares of Stellantis (STLA) rose 0.8% while General Motors (GM) shares increased 0.6%. The union said it will implement a “stand up” strategy in which workers will not strike all Big Three company plants at once but will call on select local UAW chapters to walk out at designated times.
Lennar (LEN): The homebuilding company posted a third-quarter earnings beat on Thursday, citing quarterly revenue of $8.7 billion. But shares fell more than 3% during morning trading on Friday as margins on home sales fell to 24.4% compared to the nearly 30% during the same period last year and as revenues decreased 2% from the year-ago quarter as the average sale price of home deliveries dropped.
Nikola Corporation (NKLA): Nikola’s shares climbed 1% on Friday after the car company announced an expansion of its dealer network into Canada.
Consumers inflation expectations are at their lowest level since the Fed started raising interest rates in 2021.
New data from the University of Michigan showed consumers expect prices to rise 3.1% over the next year, down from 3.5% last month, and the lowest reading since March 2021. Expectations for 5-10 year price increases fell to 2.7% in September, down from 3% the month prior.
The broad consumer sentiment index for September came in at a reading of 67.7, down from 69 last month, but up from 58.6 in July 2022.
“Throughout the survey, consumers have taken note of the stalling slowdown in inflation, but they do expect the slowdown to resume,” Joanne Hsu, director of the survey of consumers for the University of Michigan, said in a statement.
Wall Street rang in the day just under the flat line, as investors anticipate next week’s Fed huddle where central bankers will share their latest thinking on interest rate policy.
The S&P 500 (^GSPC) edged lower by 0.3%, while the Dow Jones Industrial Average (^DJI) decreased 0.1% or 40 points. The tech-heavy Nasdaq Composite (^IXIC) lost 0.3%
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