Financial Markets                      09/20 09:46

   

   NEW YORK (AP) -- Wall Street is quieter on Friday, and U.S. stocks are 
edging back from the records they set the day before during a worldwide rally.

   The S&P 500 was 0.3% lower in morning trading but still on track for its 
fifth winning week in the last six. The Dow Jones Industrial Average was down 
71 points, or 0.2%, after it likewise set an all-time high the day before. The 
Nasdaq composite was 0.3% lower, as of 10:30 a.m. Eastern time.

   FedEx dragged on the market with a drop of 14.8% after its profit and 
revenue for the latest quarter fell short of analysts' expectations. It said 
U.S. customers sent fewer packages through priority services, while it had to 
contend with higher wages for workers and other costs. FedEx also cut its 
forecast for revenue growth for its fiscal year.

   Helping to limit the market's losses was Nike, which ran 5.4% higher after 
it named Elliott Hill as its chief executive. Hill, 60, had spent more than 
three decades at Nike in various leadership positions before retiring in 2020. 
He replaces the retiring John Donahoe.

   Shares in Trump Media and Technology Group slumped another 6.8% as its 
biggest shareholder, former President Donald Trump, won the freedom to sell his 
shares if he wants.

   Trump owns more than half of the nearly $3 billion company behind the Truth 
Social platform. But Trump and other insiders in the company had been unable to 
cash in because a "lock-up agreement" prevented them from selling any of their 
shares. Before the lockup expired, Trump said he was in no rush to sell.

   TMTG stock has dropped below $14 from more than $60 in March, and its 
decline Friday was in line with its volatile history. Over the last six months, 
it's often swung by at least 5% in a day, up or down.

   Homebuilder Lennar fell 4.6% after delivering a mixed earnings report. Its 
profit for the latest quarter topped expectations. But it also said it made 
less in profit on each $100 of home sales, and it expects that margin to stay 
flat in the current quarter.

   Conditions may be set to improve for homebuilders, though. The Federal 
Reserve earlier this week cut its main interest rate for the first time in more 
than four years, with more likely to come. That could make mortgages more 
affordable for home buyers.

   The momentous move closed the door on a run where the Fed kept its main 
interest rate at a two-decade high in hopes of slowing the U.S. economy enough 
to stamp out high inflation. Now that inflation has fallen from its peak two 
summers ago, Chair Jerome Powell said the Fed can focus more on keeping the job 
market solid and the economy out of a recession.

   The Fed is still under pressure because hiring has begun to slow under the 
weight of higher interest rates. Some critics say the central bank waited too 
long to cut rates and may have damaged the economy.

   Critics also say the U.S. stock market may be running too hot on hopes that 
the Federal Reserve will be able to pull off what earlier seemed nearly 
impossible: getting inflation down to 2% without creating a recession.

   Barry Bannister, chief equity strategist at Stifel, is still calling for a 
sharp drop for the S&P 500 by the end of the year. He points to how much faster 
stock prices have climbed than profits at companies. When stocks have looked 
this expensive on such measures in the past, he said a recession and sharp 
downturn for stocks has followed.

   He also warned in a report that slowing hiring "is now symbolic of recession 
risk."

   No economic releases are on the calendar for Friday to show where the 
economy may be heading. Next week will have preliminary reports on U.S. 
business activity, the final revision for how quickly the economy grew during 
the summer and the latest update on spending by U.S. consumers.

   In the bond market, the yield on the 10-year Treasury rose to 3.75% from 
3.72% late Thursday.

   In stock markets abroad, indexes dropped across much of Europe after rising 
in Asia. Tokyo's Nikkei 225 rose 1.5% after the Bank of Japan left interest 
rates steady, as was expected.

   In China, the central bank left key lending rates unchanged on Friday. 
Indexes rose by 1.4% in Hong Kong and less than 0.1% in Shanghai.

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   AP Writers Matt Ott and Zimo Zhong contributed.

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