Alexandra Canal
Stock market today: Dow slides, Nasdaq closes at record to cap winning week
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US stocks closed mixed on Friday with the the tech-heavy Nasdaq Composite (^IXIC) logging a fresh record high as the prospect of a reversal from interest rate hikes buoyed investors' spirits.
The Nasdaq, which opened the day in the red, flipped into positive territory by mid-afternoon to close up about 0.2%. The Dow Jones Industrial Average (^DJI), which is eyeing the key 40,000 mark, fell about 0.7% while the benchmark S&P 500 (^GSPC) slipped 0.1%.
The gauges secured solid weekly gains, having racked up all-time closing highs after the Federal Reserve soothed worries it might scale back its forecast for rate cuts this year. Optimism that borrowing costs have peaked is also riding high on signs other big central banks are ready to pivot.
Read more: What the Fed rate decision means for your money
Among corporates, FedEx (FDX) shares jumped about 7% after operating margins at the parcel giant's largest unit improved amid a profit beat. But Nike (NKE) shares slid about 7% as the market absorbed disappointing sales guidance in its mixed results.
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Something to watch on FedEx
FedEx (FDX) shares are rocking by 12% this morning after earnings last night.
It was another quarter where FedEx management proved they were serious about slashing billions of dollars in costs from the business. The Street loves it when old companies like this reduce bloat and complexity from their operating models. And FedEx is doing just that.
To that end, keep an eye on the negotiations between FedEx and the US Postal Service.
FedEx allocates about 100 aircraft to carry Postal Service business, costing it about $3 billion annually, according to data from FreightWaves. The business has been a drag on the company's earnings, the industry publication says.
So with its renewed focus on cost-cutting, FedEx may be inclined to walk away from the Postal Service deal or strike a better bargain. Both would likely be viewed favorably by investors.
Here's what FedEx chief customer officer Brie Carere said on the earnings call:
"Our current contract with the United States Postal Service expires on September 29. We have made significant progress in negotiations for a new contract that aligns with our ongoing network transformation plans while providing the USPS with the operational reliability and outstanding service we have delivered for them for more than two decades. A new multiyear agreement would provide a more efficient network with service to fewer markets. It would allow us to better adjust our overall network to demand."