U.S. Stocks Rise and Set New Highs
New highs were set on Thursday to place the U.S. stocks on track to beat Wall Street’s performance estimates this year. Both the Dow Jones Industrial Average and the S&P 500 Index advanced to post milestones.
The Dow Jones climbed 251.22 (+0.95%) to cap a three-day run of gains. This is the latest leg of a nine-year rally that sent the index to its first record close since January 26. Only 2 of the Dow’s 30 components did not close in positive territory. The blue-chip benchmark ended at 26,656.98.
The S&P 500 added 22.80 points (+0.78%) to end at 2,930.75 and notch its first record since late August. The Nasdaq Composite Index finished at 8,028.23 after gaining 78.19 points (+0.98%). The tech-heavy index moved within 1.3% of its all-time high set in August. The finishing marks yesterday are within the 2018 price targets of banks such as Goldman Sachs and Bank of America Merrill Lynch.
Investors are able to look past the trade war because of the strengthening U.S. economy and positive economic data. The stock market’s rise comes with the recent spike in government-bond yields. Next week, the Federal Reserve is expected to raise interest rates.
Wells Fargo Announces Downsizing Plan
Wells Fargo & Co. (WFC) is set to implement a turnaround plan given the slowdown in refinancing demand and the headwinds the bank is facing. On Thursday, the bank said that reducing its headcount by about 5% to 10% within the next three years is included the plan.
The nation’s fourth largest bank employs about 264,500 employees (as of June 30) and 26,450 jobs would be affected once the 10% reduction is implemented. But the cuts will help the bank achieve its goal of reducing costs by $4 billion by 2020. Wells Fargo has been trying to increase profits and recover from a series of scandals while operating under the Federal Reserve’s asset cap.
Its branch count will also be reduced by about 800 by 2020. The bank will sell non-core businesses to lower costs and become more efficient. The bank laid off 600 employees in its mortgage division last month.
Fate of UK Broadcaster Sky Hangs in the Balance
The fate of the European broadcaster might be decided in a rare manner. Unless there’s a resolution of the long-running takeover battle by the close of business hours on Friday, the UK Takeover Panel will hold an auction for Sky on Saturday.
The fight between Comcast Corp. (CMCSA) and 21st Century Fox (FOX) to acquire Sky has long been going on. But it’s unusual for a UK takeover to be decided by auction. With the process, each bidder will produce a final bid which can then be evaluated by shareholders.
China Shuts Down Amazon’s Twitch
Amazon.com Inc. (AMZN) is about to lose to lose a big potential market. Twitch, which is the world’s most popular service for live-streaming video games and owned by Amazon, is no longer accessible to users inside China. The service has also disappeared from Apple’s Inc. (AAPL) iOS App Store in China. A Twitch spokesman confirmed on Friday that China blocked the service and users can no longer watch and broadcast video-game playing.
According to analytics firm App Annie, the move comes after the streaming service became the third most popular free app in the Chinese iOS store. Twitch featured competitive video gaming and became very popular with Chinese eSports fans.
The Chinese government is very sensitive about foreign companies providing media content in its territory. Chinese authorities and regulators have repeatedly cracked down on live-streaming services. Twitch is likely to face censorship sooner or later.
Apple’s New iPhone Models Hit Global Stores
Apple Inc.’s (AAPL) newest iPhone models – the iPhone XS and iPhone XS Max – are hitting stores around the world on Friday and officially knock out the iPhone X out of the tech giant’s product lineup.
The smartphone has been Apple’s biggest revenue generator for years and investors are closing monitoring its sales. The starting price of the 5.8-inch iPhone XS in the United States is $999 while the iPhone XS Max sells for $100 more.
The “affordable” iPhone XR priced at $749 ships next month. The iOS 12, Apple Watch, and the software updates to HomePod and tvOS devices will also be released.