Sept 12 (Askume) – Wall Street’s main indexes were mixed on Thursday as the Federal Reserve maintained a modest 25 basis point interest rate cut after better-than-expected producer price data, but fell after Moderna’s revenue fell less than expected.
The final demand producer price index (PPI) rose 0.2% in August, while a 0.1% increase was expected. Excluding volatile food and energy prices, the core data rose 0.3%, higher than the 0.2% expectation.
In addition, initial claims for state unemployment benefits for the week ending September 7 were in line with expectations at 230,000.
“The PPI is basically the same as yesterday’s CPI data and unemployment benefits. The unanimous filing has cleared the way for the Federal Reserve to start rate cuts,” said Chris Larkin, managing director of trading and investment at Morgan Stanley E*Trade Is cycle.
Meanwhile, shares of Moderna (MRNA.O) fell 16.8% to their lowest intraday level since November. The vaccine maker was among the biggest losers on the S&P 500 after it forecast sales of between $2.5 billion and $3.5 billion next year, below analysts’ expectations.
Expectations that the Fed would cut interest rates by a modest 50 basis points had risen in the past few weeks amid weak employment and economic growth data, but those hopes have largely faded.
Following Thursday’s data and last session’s inflation report, traders are now considering the possibility that the Fed will cut interest rates by 25 basis points at its September 17-18 meeting, according to CME Group’s FedWatch tool. This would be the first rate cut since March 2020.
“The discussion will soon turn to how much and how quickly the Fed will cut rates over time,” said E*Trade’s Larkin.
The Dow Jones Industrial Average (.DJI) fell 42.15 points, or 0.13%, to 40,819.56; the S&P 500 (.SPX) rose 10.41 points, or 0.18%, to 5,563.98; IXN rose 78.96 points.
Most sectors in the S&P 500 were higher, led by communication services (.SPLRCL) , which rose 1.2%. Energy stocks (.SPNY) also rose more than 1%.
Meanwhile, the economically sensitive small-cap Russell 2000 (.RUT) outperformed, gaining 0.9%.
Among other stocks, Micron Technology (MU.O) fell 4.2% after a report that Exxon and BNP Paribas lowered the chip maker’s stock rating to “underperform” from “outperform.”
Supermarket chain Kroger (KRN) beats second-quarter results and reports annual resultsSales exceeded the low end of forecasts, increasing by 6.5%.
Gold mining shares surged as spot gold hit a record high, with the Arca Gold BUGS Index (.HUI) rising more than 5%.
Chemicals maker Dow Chemical Co (DOW.N) lost control of the company following an accident at a Texas plant.It lowered its third-quarter revenue forecast, sending the company’s stock price down 1.3%.
On the NYSE, advancing issues outnumbered declining issues by a 2.34-to-1 ratio, and on the Nasdaq, advancing issues outnumbered declining issues by a 1.4-to-1 ratio.
28 S&P 500 stocks reached new 52-week highs and no new lows; 53 Nasdaq stocks reached new highs and 58 only hit new lows.
