Dow closes at record high, Nvidia falls after forecast
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[August 30, 2024] By
Johann M Cherian and Noel Randewich
(Reuters) - The Dow notched a record high close on Thursday in mixed
trading following robust U.S. economic data, while artificial
intelligence chipmaker Nvidia dropped after its largely in-line forecast
failed to impress investors.
The U.S. economy grew faster than initial estimates due to strong
consumer spending, the Commerce Department reported, supporting
expectations the U.S. is likely to avoid a recession.
"Downward revisions to inflation accompanying an upward revision to
spending builds the case for a soft landing," said Jeffrey Roach, chief
economist for LPL Financial.
Nvidia's quarterly revenue forecast late on Wednesday disappointed
investors accustomed to the chipmaker beating expectations by massive
margins in recent quarters.
Nvidia's stock fell over 6%, trimming its 2024 gain to 137%.
Other AI-related stocks were mixed. Microsoft gained 0.6%, while
Google-owner Alphabet dipped 0.7%.
Broadcom and Advanced Micro Devices each slid almost 1%.
"It's too early to put the bear suit on for AI related companies. We
think there's still more upside," said Terry Sandven, chief equity
strategist at U.S. Bank Wealth Management. "We see the AI revolution
still in the relatively early innings and that bodes well for tech
names."
Apple rose 1.5% after Citigroup named the iPhone maker its top AI pick.
Apple and Nvidia are in talks to invest in OpenAI as part of a new
fundraising round that could value the ChatGPT maker above $100 billion,
according to media reports.
The Dow Jones Industrial Average rose 0.59% to 41,335.05 points, an
all-time closing high. The S&P 500 index ended barely changed at
5,591.96 points, just below its July record high close as expectations
for a September interest rate cut remained robust.

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A trader works on the floor at the New York Stock Exchange (NYSE) in
New York City, U.S., August 28, 2024. REUTERS/Brendan McDermid/File
Photo

The Nasdaq declined 0.23% to 17,516.43 points.
A Labor Department report showed marginally lower-than-expected
jobless claims for the previous week.
The July Personal Consumption Expenditures report, due on Friday,
could offer hints on the central bank's monetary policy easing
trajectory.
CrowdStrike gained 2.8% after the cybersecurity company beat
quarterly revenue estimates, while Dollar General slumped 32% after
slashing its annual sales and profit forecasts.

Advancing issues outnumbered falling ones within the S&P 500 by a
2.1-to-one ratio.
The S&P 500 posted 68 new highs and four new lows; the Nasdaq
recorded 91 new highs and 90 new lows.
Volume on U.S. exchanges was relatively light, with 10.5 billion
shares traded, compared to an average of 11.6 billion shares over
the previous 20 sessions.
(Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru;
Editing by Pooja Desai, Shounak Dasgupta, Shinjini Ganguli and
Richard Chang)
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