NEW YORK MARKET CLOSE: Shares end in the green on private sector data

(Alliance News) - Shares ended in the green in New York on Friday to close out a winning week for Wall Street, as investors shook off heightened tensions between Ukraine and Russia, while positive private sector data continued to be buoyed by the service sector.

On Wall Street, the Dow Jones Industrial Average ended up 426.16 points, 1.0%, at 44,296.51. The S&P 500 rose 20.63 points, 0.4%, to 5,969.34. The Nasdaq Composite firmed 31.23 points, 0.2%, to 19,003.65.

For the week, the DJIA ended up 2.0%. The S&P and Nasdaq both rose 1.7%.

The US private sector expanded in November, according to survey data on Friday, as optimism picked up and price growth slowed.

The S&P Global flash US composite purchasing managers' index rose to a 31-month high of 55.3 points in November, from 54.1 in October.

Rising further above the neutral 50 reading, it indicates a robust rate of expansion.

However, the asymmetry of the US economy persisted, with growth being led entirely by the services sector.

The flash services PMI jumped to 57.0 from 55.0, beating FXStreet-cited market consensus of 55.3. Meanwhile, manufacturing continued to weaken, with the flash PMI edging up to 48.8 from 48.5, coming in line with consensus.

S&P Global noted: "While service sector output rose in November at the fastest rate since March 2022, manufacturing output fell at a rate not seen since December 2022. The resulting divergence in output was the widest recorded since data were first available in 2009 barring only May 2021, amid the re-opening of the economy from pandemic restrictions.

"Similarly, while new orders for services rose at a rate not witnessed since April 2022, new orders placed at factories fell for a fifth straight month, albeit registering the smallest decline seen over this period to hint at the production downturn potentially moderating in December."

Companies were more optimistic about output in the year ahead - particularly in manufacturing. Respondents cited the end of the uncertainty concerning the US presidential election, and a "more business friendly incoming administration".

Prices charged by companies saw a modest rise, slowing to a pace not seen since June 2020. Input cost inflation slowed, but remained slightly higher than the long-run average.

"The promise of greater protectionism and tariffs has helped lift confidence in the US good producing sector, which is already feeding through to higher factory employment," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

"Factories are meanwhile stepping up their purchases of imported inputs as they seek to front-run tariffs, putting pressure on supply chains to a degree not seen for over two years. Any further stretching of these supply lines could see prices move higher as demand outstrips supply," he continued.

Intuit on Thursday backed full-year guidance after a mixed start to the financial year which saw sales increase but profit fall.

Net income fell 18% to USD197 million in the quarter to October from USD241 million a year prior. Non-GAAP EPS nudged up 1.2 % to USD2.50 from USD2.47. Revenue jumped 10% to USD3.28 billion from USD2.98 billion.

"We've had a strong start to the year as we demonstrate the power of Intuit's AI-driven expert platform strategy, said Sasan Goodarzi, Intuit's chief executive officer. "By delivering 'done-for-you' experiences, enabled by AI with access to AI-powered human experts, we continue to fuel the success of consumers and businesses. Our innovation and the proof points we're observing continue to bolster our confidence in our strategy."

In the quarter, Global Business Solutions Group revenue grew 9% to USD2.5 billion, Online Ecosystem revenue increased 20% to USD1.9 billion and Credit Karma revenue rose 29% to USD524 million.

Reported Consumer Group revenue fell 6% to USD176 million, however, while ProTax Group revenue eased 7% to USD39 million.

Looking ahead, Intuit reiterated guidance for the financial 2025.

It expects revenue of USD18.16 to USD18.35 billion, growth of around 12% to 13%, GAAP operating income of USD4.65 to USD4.72 billion, growth of 28% to 30% and non-GAAP diluted EPS of USD19.16 to USD19.36, growth of 13% to 14%.

Broker Citi called the results "solid" but noted the outlook for the next quarter was below consensus.

Citi said second quarter guidance was USD52.8 million below guidance and EPS USD0.87 under, impacted by desktop promotion timing in the Consumer business.

Inuit shares fell 5.7%.

Amazon announced it has doubled its investment in AI startup Anthropic to USD8 billion.

The investment is part of the companies' effort to develop "Tranium" hardware to optimize machine learning.

"We're looking forward to working with Amazon to train and power our most advanced AI models using AWS Trainium, and helping to unlock the full potential of their technology," said Anthropic chief executive Dario Amodei.

"The response from [Amazon Web Services] customers who are developing generative AI applications powered by Anthropic in Amazon Bedrock has been remarkable," said Matt Garman, chief of AWS cloud computing division.

"We'll keep pushing the boundaries of what customers can achieve with generative AI technologies."

The announcement follows a UK Competition and Markets Authority decision on Tuesday that allowed a USD2 billion investment in Anthropic by Google-parent Alphabet.

Amazon shares eased 0.6%.

PepsiCo said it will develop its food portfolio by obtaining sole ownership of two of its joint ventures in the refrigerated dips and spreads sphere.

Pepsi will acquire the remaining 50% interests in Sabra Dipping Company and PepsiCo-Strauss Fresh Dips & Spreads International, also known as Obela.

Currently, both businesses are a 50/50 joint venture between PepsiCo and Israeli food and beverage maker Strauss Group. Sabra was established in 2008, and Obela 2012.

The joint ventures manufacture, distribute, and sell a range of refrigerated dips and spreads.

"As we evolve our food portfolio and bring people more choices for more occasions, our aim is to meet the growing demand for positive choices and on-the-go options," explained Steven Williams, chief executive officer, Foods North America.

PepsiCo ended up 1.0%.

The pound traded at USD1.2531 late Friday, down from USD1.2591 on Thursday. The euro fell to USD1.0415 from USD1.0476. Against the yen, the dollar was at JPY154.84, rising from JPY154.54.

Gold was quoted at USD2,709.78 an ounce on Friday at the time of the New York close, up from USD2,670.13 on Thursday.

Brent was quoted at USD74.64 a barrel on Friday, up from USD73.91 on Thursday. West Texas Intermediate was at USD71.30, rising from USD70.24.

In Europe on Friday, the FTSE 100 ended up 1.4% in London. The DAX 40 rose 0.9% in Frankfurt. The CAC 40 in Paris gained 0.6%

In Asia on Friday, the Nikkei 225 in Tokyo ended up 0.7%. In China, the Shanghai Composite fell 3.1%. The Hang Seng Index in Hong Kong ended down 1.9%. The S&P/ASX 200 in Sydney rose 0.9%

Monday's corporate calendar has full year results from Agilent Technologies and third quarter results from Zoom Video Communications.

The global economic calendar has the Chicago Fed national activity index, the Dallas Fed manufacturing index and Canadian manufacturer sales.

By Aidan Lane, Alliance News reporter

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