S&P500 closes lower to snap record run after Intel brings pain for tech

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S&P500 closes lower to snap record run after Intel brings pain for tech
Credit: © Reuters.

Investing.com -- The S&P500 slipped Friday, ending its five-day record run, though still ended the week in positive even as Intel's slump left a dent in big tech.

By 16:00 ET (20:00 GMT), the Dow Jones Industrial Average was up 60 points, or 0.2%, the S&P 500 fell 0.1%, while the Nasdaq Composite fell 0.4%.

Weak Intel guidance weighs; Western Digital adds to wobble in chips

Tech giant Intel (NASDAQ: INTC )'s disappointing first-quarter guidance sent shares of the chipmaker 12% lower and pressured tech stocks.

While Inte's guidance miss was a negative, there was some reason for optimism, Deutsche Bank (ETR: DBKGn ) said, as the weakness wasn't in Intel's core PC and datacenter business and management touted a return to growth this year.

"Intel expressed significant confidence in quarter-on-quarter and year-on-year revenue and EPS growth returning for the remainder of 2024," Deutsche Bank added.

As well as Intel's dump, chip stocks were also dealt a blow by a more than 3% decline in Western Digital Corporation (NASDAQ: WDC ) despite the memory chip maker's better-than-expected quarterly results and guidance.

Inflation cools ahead of Fed decision next week

The "core" personal consumption expenditures price index , which is the Fed's preferred inflation guage and excludes volatile items like food and fuel, slowed to a 2.9% pace in December, from 3.2% a month earlier, below economists' estimates of 3%.

Further signs of slowing in inflation will likely be welcomed at the Fed as they prepared for the next policy meeting slated for Jan. 30-31.

Consumer spending , which makes up the bulk of economic growth, surprised to the upside, rising 0.7%, well above estimates for a 0.4% rise, underpinning ongoing optimism the Fed's measures to cut inflation are unlikely to push the economy into severe recession.

T-Mobile US misses profit target; American Express , jumps on earnings beat, Visa stutters

The earnings season continued Friday, with T-Mobile US (NASDAQ: TMUS ) was marginally lower after the wireless carrier missed its profit target for the fourth quarter, even as it forecast monthly bill-paying phone subscriber growth for the year above estimates, banking on its wide 5G coverage and promotional offers to draw in consumers.

American Express (NYSE: AXP ) stock rose 7% after the credit card giant beat full-year profit expectations, even as it raised its loan loss provisions, bracing for a jump in potential loan defaults.

It's main rival, on the other hand, Visa (NYSE: V ) stock fell 1.7% after it offered up tepid second-quarter sales guidance, with the world's largest payments processor forecasting an uptick in the "upper mid- to high single-digit" in net revenue during its current period -- implying a slowdown from the 11% increase posted in the corresponding period in 2023.

(Peter Nurse continued to this report.)

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