Stocks held mixed on Friday, Sept. 29, as investors looked to close out a quarter filled with geopolitical tension and weather disruption.
The Dow Jones Industrial Average was down 0.09%, the S&P 500 was up 0.05%, and the Nasdaq rose 0.22%.
So far this month, the S&P 500 has risen 1.6%, the Dow 2%, and the Nasdaq 0.4%. Wall Street is on track to close out its least volatile month on record. The range between the S&P 500 Index's day-to-day session highs and session lows has been just 0.39%, which is the smallest average range during September since at least 1970.
For the quarter, the S&P 500 has climbed around 5%, the Dow 4.8%, and the Nasdaq 4.8%. Stock markets have managed to clock steady gains, and new records, even as tensions between the U.S. and North Korea threatened to spill over into warfare. The second-quarter earnings season, which occurred earlier in the third quarter, was generally positive.
Already, expectations for the third quarter have been tempered after hurricanes battered the southern U.S. and the U.S. territory of Puerto Rico. The effect of Hurricanes Harvey, Irma and Maria will likely put a dent in growth for the July-September quarter. Estimates have third-quarter GDP growth at 2.5%, according to FactSet. An initial estimate will be published on Oct. 27.
Personal incomes rose at the expected pace in August, while consumer spending ticked higher. Incomes increased by 0.2% month over month in August, the Bureau of Economic Analysis reported on Friday, roughly in line with estimates. July incomes had risen 0.3%. The savings rate held at 3.6%, while consumer spending increased 0.1%. The personal consumption expenditure index rose by 0.2%. The core rate gained 0.1%, its weakest since November 2015.
Business conditions in the Chicago region improved at a faster pace than anticipated in September. The Chicago Business Barometer increased to 65.2 in September from 58.9 in August, the Institute for Supply Management said on Friday. The measure was at its highest level in three months and second-best in more than three years. Demand, backlogs and employment all improved. Order backlogs hit their highest level since July 1988.
Consumer sentiment unexpectedly weakened in September, though not at an alarming rate, according to the final monthly reading from the University of Michigan. The reading dipped to 95.1 in September from 96.8 in August. Analysts had expected the measure to hold at a previous estimate of 95.3.
Crude oil prices were slightly lower ahead of a weekly reading on drilling activity in the U.S. The weekly Baker Hughes rig count will be released as normal at 1 p.m. ET. Baker Hughes reported that the total oil rig count had fallen by five to 744 in the previous week. Bullish inventory data mid-week had also buoyed prices.
West Texas Intermediate crude was down 0.2% at $51.45 a barrel on Friday.
Volkswagen AG (VLKAY) shares were lower Friday after the world's biggest carmaker said it would take a $3 billion hit to its third-quarter earnings linked to its plans to buyback diesel engine cars from U.S. customers sold during its emissions scandal. VW said the $3 billion charge would pay for the program, which it said was part of a settlement with authorities in North America and is "proving to be far more technically complex and time consuming" than first estimated.
Whole Foods Market, the upscale grocer recently acquired by Amazon.com Inc. (AMZN) - Get Report , said Thursday it suffered a credit card security breach at some taprooms, restaurants and other in-store venues. The company said it uses a different point-of-sale system for its roughly 450 U.S. stores, and that system wasn't involved in the data hack. Amazon transactions also weren't involved, the company said.
Finish Line Inc. (FINL) jumped more than 7% on Friday after Wells Fargo analysts raised their price target on the possibility of a deal with U.K.'s Sports Direct International (SDIPF) . The firm estimates the stock could be sold in the $14 to $16 range as part of a buyout. Wells Fargo raised their price target for Finish Line stock to $12 on a 50% probability that a deal happens.
Zogenix Inc. (ZGNX) - Get Report rocketed 117% higher on Friday after positive results from a late-stage trial of its epilepsy drug. The treatment targeted a rare form of epilepsy known as Dravet syndrome. The drug met its primary endpoint of reducing the frequency of convulsive seizures in patients.
Roku Inc. (ROKU) - Get Report set up for another solid day of gains on Friday in its second day as a public company. Shares increased 21%, adding to a 68% surge on Thursday. The streaming-device company had priced its initial public offering at $14 a share, the high end of an expected range of $12 to $14.
KB Home (KBH) - Get Report rose more than 9% on Friday following a better-than-expected third quarter. Earnings of 51 cents a share beat by a nickel, while revenue jumped nearly 25% to $1.14 billion and came in $20 million above consensus. Net orders increased 4%, while values rose 15%. Quarterly deliveries gained 11% to 2,765 homes.
A solid quarterly performance for KB Home kicked off gains among other homebuilders. D.R. Horton Inc. (DHI) - Get Report , Hovnanian Enterprises Inc. (HOV) - Get Report , Lennar Corp. (LEN) - Get Report and PulteGroup Inc. (PHM) - Get Report moved higher. The S&P Homebuilders SPDR ETF (XHB) - Get Report gained 0.6%.
Updated from 9:37 a.m. ET, Friday, Sept. 29.
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