Stocks were mostly lower Wednesday as the Dow Jones Industrial Average and S&P 500 Index retreated from record high levels as market participants looked for direction ahead of another key economic report due later this week. The 30-stock index dropped nearly 300 points, while the broader market index fell 0.2%. The tech-heavy Nasdaq Composite, however, outperformed the broader market, rising above the flatline.
Here's how the market settled on Wednesday:
S&P 500 Index (NYSE: SPY): -0.19% or -10.67 points to 5,722.26
Dow Jones Industrial Average (NYSE: DIA): -0.70% or -293.47 points to 41,914.75
Nasdaq Composite Index (NASDAQ: QQQ): +0.04% or +7.68 points to 18,982.21
Meta Connect Event:
Meta Platforms (NASDAQ: META) unveiled its latest virtual reality headset, the Quest 3S, alongside its latest augmented-reality smart glasses prototype, called Orion, and several new features for its Meta AI chatbot as its Connect event on Wednesday.
The highly anticipated Quest 3S will retail starting at $299 -- much cheaper than the $499 starting price for its previous Quest 3 headset -- with sales starting on Oct. 15. Meta will also discontinue the Quest Pro, its nearly $1,000 headset launched in 2022, and its older Quest 2 headset.
Its Orion prototype won't be sold to consumers, as Meta continues internal testing, but CEO Mark Zuckerberg said the AR glasses allow users to play games, multi-task with multiple windows and videoconference with a representative avatar of the user.
Meta also announced upgrades for Ray-Ban Meta smart glasses, which launched back in 2023 and start at $299. The smart glasses, which do not have any displays, have a built-in camera and speakers that allow the user to interact with the company's AI assistant Meta AI, among other audio features. At Wednesday's event, Meta announced new AI features, including language translation from visual signs, scan QR codes and extract information from the photos it takes, among other travel assistant features like remembering where the wearer parked or what their hotel door number was. These features will become available later this year, according to Meta.
In the News:
Flutter Entertainment (NYSE: FLUT) shares jumped Wednesday after the FanDuel parent announced a share buyback program of up to $5 billion. The online sports-betting platform also forecasts total revenue growth of about $21 billion in 2027, representing a three-year compound annual growth rate (CAGR) of 14%.
"I am very excited about Flutter's strong trajectory and how well positioned we are to capitalize on a global regulated addressable market of nearly $370bn. With our unmatched scale, diversification, and our global differentiator, The Flutter Edge, we have clear sustainable global advantages that will continue to drive sustainable growth and power our financial model with operating leverage building over time," CEO Peter Jackson said in a statement.
Berkshire Hathaway (NYSE: BRK.A) sold another large amount of its Bank of America (NYSE: BAC) holdings, bringing its total sales since mid-July to about $9 billion or 10.5% of its stake. Warren Buffett's conglomerate sold about 21 million shares between Sept. 20 and Sept. 24 for approximately $863 million, according to a recent regulatory filing.
Once its stake falls below 10%, Berkshire will no longer be required to disclose any transactions within two business days, as it has over the past few months. Buffett purchased $5 billion shares of Bank of America's preferred stock and warrants in 2011 following the global financial crisis.
General Motors (NYSE: GM) and Ford (NYSE: F) shares were lower after Morgan Stanley analyst Adam Jonas downgraded GM to Underweight from Equal Weight and F from Overweight to Equal Weight on Wednesday, citing declining U.S. consumer credit conditions and market share losses in China.
"The China capacity 'butterfly' has emerged and is flapping its wings. China produces 9mm more cars than it buys, upsetting the competitive balance in the West," Jonas wrote in a note. "Even if these units don't end up directly on US shores, the 'fungibility' of lost share and profit by key US players adds pressure here at home."
On the Earnings Front:
KB Homes (NYSE: KB) shares were under pressure on Wednesday after the homebuilder reported disappointing fiscal third-quarter earnings. Notably, the company's housing gross profit margin declined year-over-year.
"Net orders were flat with the year ago quarter," said CEO Jeffrey Mezger in a statement. "We experienced variability in demand across the quarter, with softening in late June through July, as buyers continued to evaluate elevated mortgage interest rates, and general economic concerns were rising. As rates moderated in August, our net orders improved. We are encouraged by this strengthening in demand for our affordably priced personalized homes, and the ongoing positive trend we are experiencing so far in our 2024 fourth quarter."
In Economic News:
New Homes Sales slowed by a less-than-expected rate in August, the Census Bureau reported Wednesday, as homebuilders grow more pessimistic about the current state of the housing market.
Sales fell 4.7% last month to a seasonally-adjusted annual rate of 716,000, compared to July's upwardly revised rate of 751,000. However, the decline was less than the 700,000 annual rate projected by a Dow Jones survey of economists and sales rose 9.8% compared to August 2023.
Mortgage Refinance Applications jumped 20% week-over-week last week, the Mortgage Bankers Association's seasonally adjusted index showed Wednesday, as demand surged 175% higher year-over-year.
"The 30-year fixed rate decreased for the eighth straight week to 6.13%, while the FHA rate decreased to 5.99%, breaking the psychologically important 6% level," said Joel Kan, vice president and deputy chief economist at the MBA, in a release. "As a result of lower rates, week-over-week gains for both conventional and government refinance applications increased sharply."
For Thursday:
Investors will turn their attention towards a series of Fedspeak, including Chair Jerome Powell, as well as more housing market data, second-quarter GDP revision reading, and last week's initial jobless claims results.