U.S. Index Rested After Two Consecutive Weekly Advances, Arm IPO Seeks $52 Billion Valuation

Barry Adams
05 Sep, 2023
New York City

On Wall Street stocks were little changed as investors returned after a three-day weekend on Tuesday. 

Market indexes were under pressure as investors debated the rate path amid growing evidence of global economic slowdown. 

Commodities prices traded down after China's service sector growth dropped to an eight-month low in August as new orders fell and exports declined. 

Business activity growth in the Euro Area declined in August to the lowest level since November 2020  as the weakness in the economy spread to the service sector. 

The moderate jobs expansion in the U.S. in August raised hopes that the Federal Reserve may avoid a recession and guide the economy into a soft landing amid resilient consumer spending and healthy  labor market. 

Despite the two jobs reports showing moderating labor market expansion, the report on core PCE index, an alternative measure of inflation, showed the stubborn nature of inflation. 

Investors are divided into two camps, one looking for the Fed to pause rate at its next meeting ending on Sep 20 and the other hoping for the Fed to lift rates one last time in the year. 

 

U.S. Indexes & Yields 

The S&P 500 index traded down 0.02% to 4,507.02 and the Nasdaq Composite fell 0.02% to 14,003.02. 

The yield on 2-year Treasury notes decreased to 4.91%, 10-year Treasury notes inched higher to 4.23% and 30-year Treasury bonds edged down to 4.35%. 

Crude oil turned volatile after Saudi Arabia extended its voluntary one million barrels  a day production cut to the end of the year, according to a release by the Saudi Press Agency. 

Crude oil increased $0.73 to $86.76 a barrel and natural gas prices decreased 6 cents to $2.57 a thermal unit. 

 

U.S. Stock Movers 

Airbnb Inc jumped 6.3% to $140.81 after the S&P Dow Jones Indices announced Friday that the short term rental platform operator will be included in the S&P 500 index from Sep 18. 

Blackstone and Airbnb will replace Newell Brands and Deere & Company. 

Brady Corp soared 11.1% to $56.48 after the company posted quarterly results and reported adjusted earnings per share of $1.04. 

Warner Bros Discovery Inc decreased 0.5% to $11.52 after the company said that the current strikes from writers and actors could negatively impact adjusted operating earnings between $300 million and $500 million. 

The company provided the latest projections in a filing with the SEC. 

The movie studio operator is expecting lower adjusted operating earnings for the full year in the range of $10.5 to $11 billion, reflecting impact from strikes. 

The company revised higher its full-year free cash flow expectations to at least $5 billion and third quarter free cash flow of $1.7 billion, in part due to strong performance of Barbie. 

SoftBank controlled chip design firm Arm said it plans to list its stock on the New York Stock Exchange at a price between $47 and $51 a share, valuing the British company at $52 billion. 

SoftBank acquired the advanced chip design firm for $32 billion in 2016 and plans to sell 9.4% of the company and raise between $4.5 billion and $4.9 billion.