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Dow, S&P 500, Nasdaq Close at Record Highs on Hopes of Fed Rate Cut

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all closed at record highs Friday as investors continued to expect an interest rate cut from the Federal Reserve.
  • Facebook (FB)  was the target of criticism from President Donald Trump, who, along with a growing list of regulators and lawmakers, is concerned with the social media giant’s plans to launch a global digital currency. Late Friday reports emerged that the FTC has approved a $5 billion settlement with Facebook in a privacy case. Facebook is Real Money’s Stock of the Day.
  • Industrial equipment maker Hillenbrand (HI) said it has agreed to buy plastics-processing equipment maker Milacron Holdings (MCRN) in a cash-and-stock deal valued at about $2 billion, including debt.

Wall Street Overview

The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all closed at record highs Friday as investors continued to expect interest rate support from the Federal Reserve while betting on the underlying strength of the domestic economy.

The Dow, which passed 27,000 for the first time ever in trading Thursday, rose 243 points, or 0.90%, to 27,332.03. The S&P 500, which passed 3,000 for the first time on Wednesday, advanced 0.46% to 3,013.77. The Nasdaq rose 0.59% to end at 8,244.14.

Fed Chairman Jerome Powell on Thursday repeated his view that U.S. interest rates have room to go lower in the coming months, despite a surprise uptick in consumer prices in June, telling lawmakers on the Senate Banking committee that historic connections between low unemployment and rising wages and inflation are less evident in the changing U.S economy.

 “We’re learning that interest rates — that the neutral interest rate — is lower than we had thought and I think we’re learning that the natural rate of unemployment is lower than we thought,” Powell said. “So monetary policy hasn’t been as accomodative as we had thought.”
Meanwhile, China’s trade surplus with the United States hit a fresh record high over the first half of the year, China’s General Administration of Customs said, even as overall activity slowed amid the ongoing tariff disputes between the world’s two biggest economies.
Embattled U.S. Labor Secretary Alexander Acosta resigned Friday under pressure after he was criticized for making a lenient plea deal with billionaire sex offender Jeffrey Epstein in 2008 when Acosta was a U.S. attorney in Florida.
In economic news, the U.S. producer price index rose 0.1% in June as the cost of energy and other goods fell for a second straight month, the Labor Department said, following a similar gain in May.  Core PPI, which excludes food and energy prices, rose 2.3% year over year in June.
“The PPI numbers were respectable, especially the core PPI rate as it held steady at 2.3%,” said David Madden, a market analyst at CMC Markets UK. “When you take into account that U.S. core CPI edged up (Thursday), it paints a picture of firm demand, which in a way calls into question the Fed’s apparent desire to lower interest rates.”
Facebook ( FB)  was the target of criticism from President Donald Trump, who, along with a growing list of regulators and lawmakers, is concerned with the social media giant’s plans to launch a global digital currency. Facebook is Real Money’s Stock of the Day. The Wall Street Journal reported that the Federal Trade Commission had approved a roughly $5 billion billion settlement with Facebook over the company’s 2018 Cambridge Analytica scandal. Shares were up 1.8% to $204.87.
Ford Motor ( F) and Volkswagen ( VLKAF) formally announced their global collaboration on self-driving and electric cars in the U.S. and Europe, signaling a new era in the automotive world that focuses on technology and innovation — and staying competitive. Shares of Ford were up 2.9% to $10.49, while Volkswagen was up nearly 2% to $174.48.
Industrial equipment maker Hillenbrand ( HI) said it has agreed to buy plastics-processing equipment maker Milacron Holdings ( MCRN) in a cash-and-stock deal valued at about $2 billion, including debt. Shares of Hillenbrand tumbled 13% to $33.83, while Milacron soared 23.7% to $16.74.
Boeing ( BA)  reassigned the head of its next airplane project to run the troubled 737 program, according to a memo seen by Reuters.  Boeing’s 737 program manager, Eric Lindblad, will retire in a matter of weeks after roughly 12 months on the job. Separately, United Airlines UAL said it would extended its cancellations of MAX flights until November 3. Shares of Boeing were up 1.8% to $365.37.
Global oil prices rose as Tropical Storm Barry barreled toward the Louisiana coast, shutting down nearly half of the daily production from Gulf of Mexico drillers. The storm is expected to his parts of Louisiana by Saturday morning.

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