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Dow rises to record high as S&P launches new sector

The Dow hit a record high Friday, shrugging off the specter of the Trump administration’s latest levies on Chinese imports set to launch Monday. The S&P 500 dipped into the red at the closing bell Friday, but still ended the week up.

The Dow (^DJI) closed up 0.32%, or 86.5 points, while the S&P 500 (^GSPC) closed down 0.04%, or 1.08 points. The tech-heavy Nasdaq (^IXIC) fell 0.5%, or 41.3 points.

The S&P Global Industry Classification Standard (GICS) completed its largest revision since 1999 after rolling some internet and media stocks into a new category called communication services after market close Friday. S&P Dow Jones Indices and MSCI Inc. first announced the revisions earlier in the year.

The shakeup involved plucking major FAANG stocks such as Facebook (FB) and Google parent company Alphabet (GOOG) from their current classification – information technology – into the new communications category. Netflix (NFLX), TripAdvisor (TRIP) and Comcast (CMCSA) are also part of the communications sector, while e-commerce giants Alibaba (BABA) and eBay (EBAY) have shifted into the consumer discretionary group.

The reclassification coincided with Friday’s “quadruple witching,” when futures and options and indexes and individual stocks expire, which tends to lead to above-average volumes in trading.

STOCKS: Tilray erases gains

Shares of the Cannabis company Tilray (TLRY), which surged earlier in the week at levels reminiscent of the cryptocurrency craze of last year, sank 30.25% to $123 at the close, solidifying a two-day decline. Tilray shares had been up more than 90% during intraday trading Wednesday, peaking at $300 per share.

Shares of Micron (MU), were down 2.87% to $44.74 at market close Friday after the company offered disappointing revenue forecasts Thursday that sparked concern about demand. The largest U.S. memory chip producer said its gross margins would narrow in the near-term due to the Trump administration’s announced 10% tariff on $200 billion of Chinese goods, which will take effect Monday.

Shares of Under Armour (UAA) closed up 3% percent to $18.70 Friday following the company’s Thursday announcement of a new round of layoffs intended to optimize “strategic growth initiatives and overall business performance.” The sports apparel company lifted its full-year outlook accordingly, with adjusted diluted earnings per share predicted to be in the range of 16 to 19 cents, versus 14 to 19 cents previously. JPMorgan upgraded Under Armour’s rating to “neutral” from “underweight” Friday and raised the price target to $20 from $16.

American Airlines (AAL) became the latest commercial air service to raise its checked bag fees, following in the steps of United Continental, Delta Airlines and Jet Blue. The first checked bag will be $30, up from $25, and the second $40, with the change implemented starting Friday. Shares of American Airlines were up 4.08% to $43.60 at the close.

NEWS: Comcast and Fox head to the auction house over Sky

Comcast and Fox (FOX), two of America’s biggest media companies, are buckling up for an auction over British broadcaster Sky (SKY.L), which could last as long as three rounds over the course of the weekend. Fox, working in tandem with Disney (DIS), last submitted a $32.5 billion bid, while Comcast offered $34 billion for the company. The American company emerging victorious will benefit from Sky’s international scope and reach in European homes.

Wells Fargo (WFC) Chief Executive Officer Tim Sloan said Thursday that the banking company intends to slash 5% to 10% of its workforce, which would result in a cut of as many as 26,500 jobs over the next three years. The headcount reduction is part of the bank’s plan to reduce costs following a slew of scandals that resulted in high legal fees and fines. Sloan told Bloomberg News Friday that he intends to continue spearheading the company for as long as he is backed by his board. Chairman Betsy Duke said Wednesday that Sloan has the board’s unanimous support as he’s taken steps to revamp the company.

Walmart (WMTsent a letter to U.S. Trade Representative Robert Lighthizer demanding that the Trump administration pull back on tariffs imposed on Chinese imports. The tariffs – set to impact consumer goods including shampoo, mattresses, air conditioners, dog food and lights – would force America’s largest retailer to raise prices, Walmart argued. The administration has since been unmoved and will move forward with the levies starting Monday.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 20, 2018. REUTERS/Brendan McDermid

ECONOMY: U.S. PMI data points to “darkening” outlook

Markit US released its monthly purchasing managers’ index, an indicator of manufacturing and service sector health. Manufacturing PMI results were 55.6, while services PMI came in at 52.9. Each was anticipated to be 55.0, according to economists’ average estimate as compiled by Bloomberg.

“With storms hitting the east coast, it was no surprise to see some disappointing survey data in September, with the flash PMI indicating that the pace of economic growth slipped to its lowest for almost one-and-a-half years,” Chris Williamson, chief business economist at IHS Markit, said in a statement.

He added that the escalation of trade wars and the accompanying rise in prices have contributed to “a darkening of the outlook, with business expectations for the year ahead dropping sharply during the month.”

Emily McCormick is a reporter at Yahoo Finance.

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