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Key Takeaways
- The S&P 500 slipped 0.2% on Friday, Sept. 20, receding from the record high it printed after this week’s interest-rate cut by the Federal Reserve.
- FedEx shares dropped after the package delivery giant missed quarterly estimates and reduced its full-year guidance, citing soft demand.
- Constellation Energy said it will restart operations at a shuttered nuclear plant to provide clean energy for Microsoft data centers, and shares of the utility soared.
Major U.S. equities indexes were mixed on the final day of a trading week that saw the financial headlines dominated by the latest Federal Reserve policy meeting.
A day after notching an all-time closing high in the wake of the Fed’s decision to lower interest rates, the S&P 500 slipped 0.2% on Friday. After wavering for much of the session, the Dow rallied in the afternoon to close with a gain of less than 0.1%, eking out its second straight record close. The Nasdaq ended Friday’s session 0.4% lower.
FedEx (FDX) shares plummeted 15.2%, the steepest drop of any S&P 500 stock, after the package delivery giant reported lower-than-expected quarterly results and trimmed its full-year forecasts. The company cited soft demand trends, especially in U.S. markets. Following the earnings release, analysts at the investment bank Jefferies reduced their price target on FedEx stock.
Lennar (LEN) topped sales and profit estimates with its fiscal third-quarter results, but shares of the homebuilder fell 5.4% after it predicted its gross margin on home sales would remain flat quarter-over-quarter. Friday’s downdraft reversed the gains posted by Lennar stock in the previous session following the Fed’s rate-cut announcement.
Shares of Old Dominion Freight Line (ODFL) also gave back the gains they notched after the Fed’s decision, dropping 5.2% on Friday. The less-than-truckload (LTL) freight company is navigating numerous headwinds, with shipment volumes and rates coming under pressure amid soft freight demand, increasing capital expenditures and a shortage of drivers.
Electric utility Constellation Energy (CEG) announced plans to restart operations at Pennsylvania’s Three Mile Island Unit 1 nuclear plant to provide environmentally friendly energy for Microsoft (MSFT) data centers. Constellation said it inked a 20-year deal with the software giant to create the Crane Clean Energy Center, generating carbon-free electricity to power Microsoft’s data centers on the Pennsylvania-New Jersey-Maryland power transmission system. Constellation Energy shares soared 22.3% on Friday, notching the top performance in the S&P 500.
Constellation’s announcement also helped lift shares of other electricity generators, including those of power utility Vistra (VST), which jumped 16.6%. Vistra also announced it will acquire the remaining 15% stake that it does not currently own in its subsidiary Vistra Vision, which includes nuclear, solar, and energy storage assets. Meanwhile, shares of fellow Texas-based power generator NRG Energy (NRG) added 6.4%.
Shares of CrowdStrike Holdings (CRWD) gained 8.1% following positive comments from analysts at Citigroup. The cybersecurity firm drew negative attention in July when a faulty update of its security software caused widespread technology outages worldwide. However, analysts applauded transparency from the company’s management team following the incident. Citi also pointed to CrowdStrike’s success in limiting customer churn and maintaining pricing.