The Dow Jones Industrial Average emerged victorious yesterday, climbing by 0.3%, or approximately 115 points, in light of investors’ upbeat sentiment that a recent surge in the unemployment rate, as indicated by the latest employment report, might persuade the Federal Reserve to halt its interest rate hikes. This positive movement broke the Dow’s two-week losing streak, finishing the week with a roughly 1% increase. Notably, the tech giant Intel significantly contributed to this upward trajectory with its shares soaring 4%, following Dell Technologies’ impressive earnings report driven by the high demand for AI technology.
However, not all companies shared in the Dow’s success. Walgreens Boots Alliance, the Dow’s most underperforming stock this year, experienced a sharp 7% drop in shares after the announcement of CEO Rosalind Brewer’s resignation. This news marks another blow to the pharmacy chain which has suffered a 36% decrease in stock value this year alone, culminating in a 50% decline over the past two years. In contrast, Chevron and Visa shares saw a rise of 2% and 1% respectively, fueled by future prospects of higher oil prices and increased merchant fees.
Dow Jones Surges Based on Employment Report Optimism
The Dow Jones Industrial Average finished higher by about 115 points or 0.3%, making it the day’s best-performing stock index. Investors are optimistic that the latest employment report showing a rise in unemployment rate may prompt the Federal Reserve to halt its interest rate hikes. This development ended a two-week losing streak for The Dow, allowing it to finish higher by approximately 1% for the week.
Intel and Dell Drive Tech Stocks Higher
Intel (INTC) saw a surge in their shares, up 4%, after Dell Technologies (DELL) reported better than expected results due to the demand for artificial intelligence technology. Dell uses Intel chips in some of its models.
Chevron Shares Rise with Oil Price Predictions
Chevron (CVX) shares also moved higher by 2% after analysts predicted that oil prices are set to increase in 2023. Some oil-producing countries in the OPEC+ have pledged to slow down their production, which is likely to affect oil prices positively.
Visa and Mastercard Benefit from Fee Hike
Visa (V) and American Express (AXP) shares each rose by 1% following reports that Visa and Mastercard (MA) plan to increase their fees for merchants. This news also sent Mastercard stocks higher by 0.7%.
Walgreens Drops after CEO Resignation
In contrast, Walgreens Boots Alliance (WBA) shares saw a sharp decline of over 7% following the announcement of CEO Rosalind Brewer’s resignation after three years in charge of the pharmacy chain. Walgreens has been the Dow’s worst performer this year, with a 36% decrease, contributing to a total 50% decline over the past two years.
Disney and Charter Clash over Costs
Shares of Walt Disney Co. (DIS) fell 2.5% after it withdrew its programming from the Charter Spectrum (CHTR) cable system due to a cost dispute. This incident resulted in ESPN going off the air on these systems right at the start of football coverage. Charter’s shares also dropped by over 3%.
Final Thoughts
The Dow’s surge, driven by optimism over the latest employment report, indicates the significant impact of macroeconomic indicators on stock markets. The performance of Intel and Dell further underscores the growing importance and demand for AI technology. The fall in Walgreens’ shares following the CEO’s departure raises questions about the company’s future direction, while the clash between Disney and Charter highlights the ongoing tensions over cost in the media industry.
