Stocks experienced a mixed performance in midday trading on Friday as the market took a brief pause from a recent rally that has propelled major indexes to record highs. The Dow Jones Industrial Average (DJI) rose by 0.3% following a strong start that marked its first record high since December. This upward momentum was significantly driven by an impressive 11% increase in shares of UnitedHealth (UNH), after news emerged late Thursday that Warren Buffett's Berkshire Hathaway had acquired a stake in the struggling healthcare insurer.
Meanwhile, the benchmark S&P 500 (SPX) recorded a decline of 0.3%, after achieving record closings for three consecutive sessions. The Nasdaq Composite (IXIC), known for its heavy concentration of technology stocks, fell 0.5% as well. On the previous day, stocks ended the session nearly unchanged, having spent considerable time in negative territory due to a report on wholesale inflation that exceeded expectations. This development has caused a reassessment of the potential for interest rate cuts by the Federal Reserve.
Despite the midday fluctuations, the major indexes remain poised to achieve weekly gains for the second consecutive week. Investors are closely monitoring various economic data releases this morning. A report on retail sales met expectations, while a key indicator of consumer sentiment fell slightly short of predictions. Market participants are keenly observing these data points for signs that could influence the Fed's decision on cutting its benchmark interest rate for the first time this year.
Health insurance stocks exhibited broad gains on Friday, buoyed by the surge in UnitedHealth's stock. Other companies in this sector performed well, with Centene Corp. (CNC) soaring 5.5%, and both Molina Healthcare (MOH) and Elevance Health (ELV) climbing approximately 4%. In contrast, shares of leading technology firms displayed a mixed reaction. Chip giants Nvidia (NVDA) and Broadcom (AVGO) each fell around 2%, while Tesla (TSLA) experienced a 1% decline. Notably, Apple (AAPL) and Amazon (AMZN) also saw slight decreases, while Microsoft (MSFT), Alphabet (GOOG), and Meta Platforms (META) each posted gains of less than 1%.
In a significant development, shares of Intel (INTC) jumped 5% following reports that the Trump administration is considering a potential stake in the beleaguered chipmaker. However, other semiconductor stocks faced pressure today, with Applied Materials (AMAT) plummeting 13% after providing a disappointing outlook. Additionally, KLA Corp. (KLAC) and Lam Research (LRCX) both dropped approximately 8%, contributing to a decline of over 2% in the VanEck Semiconductor ETF (SMH).
In the cryptocurrency market, Bitcoin was trading at $117,000, down from an overnight peak of $119,300. The digital currency had reached a record high of $124,500 earlier in the day before losing ground. The U.S. dollar index, which gauges the dollar's performance against a basket of foreign currencies, decreased by 0.5% to 97.80, marking its lowest level in three weeks.
The yield on the 10-year Treasury, which impacts borrowing costs for various loans, including mortgages, stood at 4.31%. This follows a rise of nearly 10 basis points to 4.29% after the wholesale inflation report. The yield had previously dipped as low as 4.18% last week, its lowest point since early May, reflecting increased market expectations for interest rate cuts by the Fed following a lackluster July jobs report.
In the commodities market, West Texas Intermediate futures, the U.S. crude oil benchmark, fell by 0.9% to $63.40 per barrel, reaching levels not seen since early June. Meanwhile, gold futures recorded a modest increase of 0.2%, trading at $3,390 an ounce.
