The S&P 500 ended a five-session streak of record highs on Friday, with Intel slumping after a bleak revenue forecast, while U.S. economic data showed inflation moderating.
Even as the S&P 500 and Nasdaq ended the session lower, all three major indexes recorded their third straight weekly gain and their 12th weekly advance out of 13.
For the week, the S&P 500 added 1.06%, the Dow gained 0.65% and the Nasdaq advanced 0.94%.
The S&P 500 declined 0.07% to end the session at 4,890.97 points. The Nasdaq declined 0.36% to 15,455.36 points, while Dow Jones Industrial Average rose 0.16% to 38,109.43 points.
Intel (INTC) - Intel fell 11.9% after the semiconductor company issued a revenue forecast for the first quarter that was significantly below analysts’ expectations. Intel said it expects revenue in the period of $12.2 billion to $13.2 billion, below consensus of $14.2 billion. The company forecast adjusted earnings in the first quarter of 13 cents a share, below analysts’ estimates of 34 cents. Chief Executive Pat Gelsinger said Intel’s forecast was taking a hit from struggles in the company’s programmable-chip unit and its autonomous-driving business.
Shares of other chip makers sank: AMD fell 1.7%, Nvidia dropped 1%, Broadcom declined 2%, and Qualcomm fell 2.4%.
American Express (AXP) - American Express reported fourth-quarter earnings of $2.62 a share on revenue of $15.8 billion. The company said it expects revenue in 2024 to increase 9% to 11% with earnings of $12.65 to $13.15 a share. American Express said demand for its premium products “remained robust.” Shares rose 7.1%.
Visa (V) - Visa reported adjusted first-quarter earnings of $2.41 a share, better than forecasts of $2.34 as revenue rose 9% to $8.63 billion. Visa said payments volume rose 8% and processed transactions rose 9% in the period. The company reiterated its revenue and per-share profit forecast for the fiscal year. The stock closed down 1.7%.
Spirit Airlines (SAVE), JetBlue (JBLU) - Spirit Airlines dropped 13.4% after JetBlue Airways warned it may have to terminate its merger with the budget carrier as soon as Sunday if certain closing conditions weren’t met. A federal judge blocked their planned merger earlier this month but the airlines had said they planned to appeal. JetBlue rose 3.5%.
Western Digital (WDC) - Western Digital reported a fiscal second-quarter adjusted loss of 69 cents a share, narrower than analysts’ estimates that called for a loss of $1.12. Revenue fell 2% to $3.03 billion from $3.11 billion in the year-earlier quarter. Cloud revenue fell 13%. Western Digital issued third-quarter sales guidance of $3.2 billion to $3.4 billion, compared with analysts’ expectations of $3.15 billion. Shares declined 3.5%.
KLA Corp. (KLAC) - KLA Corp., which makes equipment for the semiconductor industry, reported fiscal second-quarter profit of $582.5 million, or $4.28 a share, compared with $978.8 million, or $6.89 a share, a year earlier. Revenue fell to $2.49 billion from $2.98 billion a year earlier. KLA said it expects fiscal third-quarter revenue of $2.3 billion, plus or minus $125 million, versus expectations of $2.45 billion. KLA shares declined 6.6%.
Norfolk Southern (NSC) - Norfolk Southern fell 1.5% after adjusted quarterly earnings at the railroad operator missed estimates and the company recorded another charge—this time of $150 million—associated with the East Palestine train derailment in February 2023.
Snap (SNAP) - Snap was raised to Buy from Hold at Deutsche Bank and the price target was raised to $19 from $10. Shares of the Snapchat parent fell 0.3% to $16.25.
An important inflation gauge released Friday showed that the rate of price increases cooled as 2023 came to a close.
The Commerce Department’s personal consumption expenditures price index for December, an important gauge for the Federal Reserve, increased 0.2% on the month and was up 2.9% on a yearly basis, excluding food and energy. Economists surveyed by Dow Jones had been looking for respective increases of 0.2% and 3%.
On a monthly basis, core inflation increased from 0.1% in November. However, the annual rate declined from 3.2%. The 12-month rate is the lowest since March 2021.
Microsoft Corp.’s Teams suffered an outage Friday, prompting users to voice their frustration on social media with the workplace-communications platform.
“User reports indicate problems at Microsoft Teams,” the Down Detector website, which monitors online outages, posted Friday. Down Detector showed that as of 1:43 p.m. Eastern time, users had submitted 14,599 reports of problems with Microsoft Teams.
“We’ve identified a networking issue impacting a portion of the Teams service and we’re performing a failover to remediate impact,” Microsoft 365’s official updates account on X posted Friday morning.