Major US stock indexes closed lower on Friday, February 16th, 2024, as worries about inflation re-emerged after a key economic report showed producer prices rose more than expected in January. This report followed similar concerns fueled by earlier consumer price data.

The S&P 500 ended the day down 0.5%, marking a weekly loss but managing to stay above the key 5,000 level crossed the previous week. Similar declines were seen in the Dow Jones Industrial Average and the Nasdaq Composite.

Several individual stocks experienced significant movements:

• Digital Realty Trust (DLR): Shares plummeted 8.4% after the real estate investment trust missed analyst expectations for both revenue and funds from operations (FFO).

• Adobe (ADBE): Concerns about competition from OpenAI’s new text-to-video generator Sora sent shares down 7.4%.

• Paramount Global (PARA): Warren Buffett’s Berkshire Hathaway reduced its stake in the entertainment giant, leading to a 4.7% drop in share price.

• Applied Materials (AMAT): Strong earnings and positive guidance based on AI-driven demand boosted shares by 6.3%, making it the S&P 500’s best performer on Friday.

• Vulcan Materials (VMC): Beating revenue and earnings estimates, coupled with the benefit of higher prices, resulted in a 5.2% gain for the crushed stone producer.

• Albemarle (ALB): The world’s largest lithium producer exceeded expectations with its fourth-quarter results and announced cost-cutting measures, pushing its share price up 4.3% despite lowering its 2030 demand forecast.

Analysis:

While the stock market ended the week on a downbeat note, the losses were relatively moderate compared to recent volatility. Investors remain cautious about the pace of inflation and its potential impact on economic growth and monetary policy. However, positive performances from companies like Applied Materials and Vulcan Materials suggest continued pockets of strength in specific sectors.

Oliver Brown