Economy Desk: US stocks closed the week with a mixed course amid growing economic uncertainty and concerns over tech shares’ valuations.
The Dow was up 0.16%, or 74.8 points, to close at 46,987.1, while the S&P 500 rose 0.13%, or 8.48 points, to 6,728.8.
On the other hand, the Nasdaq fell 0.22%, or 49.46 points, to end the week at 23,004.54.
The Volatility Index (VIX), also known as the “fear index,” fell 2.15% to 19.08.
The government shutdown and concerns about technology stock valuations drove the mixed course at the weekly close.
After Senate Minority Leader Chuck Schumer presented Republicans with a new plan that would allow the record-breaking government shutdown to end, stocks recovered from their lows. In exchange for a one-year extension of improved Affordable Care Act tax credits, the proposal would provide short-term funding for federal government operations. But the Republicans dismissed the plan.
The shutdown has disrupted the flow of economic data, and alternative indicators are being closely monitored by investors.
Also, the shutdown has taken a toll on air travel. Transportation Secretary Sean Duffy announced Wednesday that he would be reducing flights by 10% at 40 major airports beginning Friday. The move might affect between 3,500 and 4,000 flights every day.
More than 700 US flights had already been canceled as of Friday.
Additionally, persistent concerns about “high valuations” for tech companies also kept risk appetite low.
Shares of Oracle, which plays a significant role in the AI sector, fell 1.9%, Advanced Micro Devices (AMD) slipped 1.8%, and Broadcom was off 1.7%.
Tesla shares were also down 3.7% after the shareholders approved a pay package Thursday worth $1 trillion for CEO Elon Musk, contingent upon his meeting performance targets.
Investors also evaluated company balance sheets; shares of financial services company Block fell 7.7% after its third-quarter earnings missed expectations.
Shares of tech firm Sandisk climbed 15.3% after its quarterly financial results exceeded expectations.
On the economic data side, the University of Michigan’s consumer sentiment index fell to 50.3 points in October, its second-lowest on record, just above June 2022’s 50 points.
Consumers have expressed concern about the potential negative effect on the economy of the more than month-long federal government shutdown.
Short-term inflation expectations of US consumers were down to 3.2% in October, according to a Federal Reserve New York survey.
