NEW YORK - Stocks closed with mixed results on Wall Street after some late-day selling. The S&P 500 was essentially flat after giving up an earlier gain of nearly 1%. The Nasdaq fell 0.2%, while the Dow Jones Industrial Average managed a gain of 243 points, or 0.6%. Nvidia weighed on the market with a drop of 6.4%. Its stellar results for the second quarter failed to meet the lofty expectations of some analysts. On the economic front, the Commerce Department upgraded its assessment of U.S. economic growth for the second quarter to 3%, compared to a previous estimate of 2.8%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stock indexes rose on Wall Street Thursday as markets shift their focus back to the U.S. economy.
The S&P 500 was up 0.1% in afternoon trading after giving up most of its gains from earlier in the day. The benchmark index is about 1.2% away from its record set in July. The Dow Jones Industrial Average added 308 points, or 0.8%, and is on track to set a record high. The Nasdaq slipped 0.3% as of 3:20 p.m. Eastern after having been up 1.3% in the early going. Despite the late-afternoon fade in the indexes, gainers outnumbered decliners by nearly three to one on the New York Stock Exchange.
The Commerce Department upgraded its assessment of U.S. economic growth for the second quarter to 3%, compared to a previous estimate of 2.8%. It's another signal that the economy remains strong, despite pressure from stubborn inflation and high interest rates.
The market’s gains came despite a drop in Nvidia, which has ridden the frenzy over artificial intelligence to become one of the S&P 500’s most influential companies. Its shares fell 6.4% despite . The stock, with a total market value topping $3 trillion, is still up 138% in 2024.
Nvidia's earnings beat and forecast may not have been a big enough surprise for some traders, but surging demand for its artificial intelligence chips show that “it is powering the AI revolution,” said Wedbush Securities analyst Dan Ives, in a note to investors.
“The tech stalwart delivered massive ‘drop the mic’ numbers yet again,” he said.
CrowdStrike Holdings jumped 3.7% after the cybersecurity company beat analysts’ second-quarter financial forecasts. The company had a during its most recent quarter, which triggered a technology meltdown that stranded thousands of people in airports, among other disruptions.
Dollar General slumped 29.7% after cutting its earnings forecast. Best Buy jumped 13.4% after the nation’s largest consumer electronics chain , even as sales slipped and it cut guidance for the year.
The mostly solid earnings and economic growth updates are capping off a month of encouraging reports for the broader economy. Data from various reports in August have shown that retail sales, employment and consumer confidence remain strong.
“Solid growth of consumer spending propelled the economy forward in the second quarter, and the increase of consumer confidence in July suggests it will propel growth in the second half of the year as well," said Bill Adams, chief economist for Comerica Bank.
The key report this week comes on Friday, when the U.S. government releases its July data on inflation with the PCE, or personal consumption and expenditures report. Economists expect the PCE, which is the Federal Reserve’s preferred measure of inflation, to show that inflation edged up to 2.6% in July from 2.5% in June. It was as high as 7.1% in the middle of 2022.
The solid economic data and easing of inflation have bolstered hopes for the Federal Reserve to achieve what it hopes is a “soft landing” for the economy after raising its benchmark interest rate to a two-decade high. The goal was to slow the economy and tame inflation without causing a recession.
The central bank has signaled that . Traders expect the first cut to happen at the next meeting in September. The market is betting that the Fed will cut its benchmark rate by 1% by the end of the year.
Anticipation for lower interest rates ahead is helping to ease some pressure on what has been a tight housing market. The average rate on a 30-year mortgage eased for the second week in a row and remains at its lowest level in more than a year. Still, most economists expect it will take even lower rates to get would-be homebuyers off the sidelines.
Bond yields rose in the Treasury market. The yield on the 10-year Treasury rose to 3.87% from 3.84% late Wednesday.
Markets in Europe were mostly higher and markets in Asia were mixed.
