US stocks slip as investors weigh FedEx slump, Fed outlook

U.S. stocks were lower Friday, as investors weighed up a slump in Fedex and expectations or further Federal Reserve rate cuts following the central bank's jumbo cut earlier this week.   

At 2.58 p.m. ET (1858 GMT), Dow Jones Industrial Average fell 11 points, or 0.03%, S&P 500 dropped 0.3%, and the NASDAQ Composite slipped 0.3%.

The Dow Jones and the S&P 500 both closed at record highs on Thursday, with buying spurred largely by optimism over lower interest rates in the wake of the Federal Reserve's decision to start a rate-cutting cycle on Wednesday.

Despite Friday's minor losses, the three major averages are on pace for weekly gains, with the S&P 500 up nearly 1.6%, the DJIA up 1.5%, while the Nasdaq has outperformed, with a 1.9% advance.

"Historically, stocks have performed well in periods when the Fed is cutting  rates while the US economy is still growing. Markets now appear to be  expecting this outcome," said analysts at UBS, in a note.

"This marks a turnaround from concerns at the start of August, when weak US job data fueled concerns that the Fed had waited too long before cutting rates." Fed speakers return following jumbo rate cut

Federal Reserve speakers returned to the spotlight following the 'black out' period, with remarks form Philadelphia Fed  president Patrick Harker and fed Governor Michelle Bowman in focus.      

Fed Governor Michelle Bowman said Friday that she voted against the central bank's decision to begin the rate-cutting cycle with jumbo cut to avoid stoking expectations that the Fed has won its battle against inflation.

Bowman was the sole voting Fed member who voted against the Fed's 50 basis point cut in September in favor of a lesser 25bps cut.  Fedex slides on weak earnings, American Airlines eyeing Citi as new credit card partner, Nike jumps on CEO change

Delivery and logistics giant FedEx (NYSE:FDX ) stock slid nearly 14% after logging substantially weaker-than-expected quarterly earnings.

The company was hit by customers shifting to cheaper, slower options, while industrial demand was also softer than expected.

FedEx is considered as a bellwether for the global economy, given its heavy exposure to trade. Its weak quarterly earnings also raise questions over a potential slowdown in activity.

Nike (NYSE:NKE ) stock rose 6% after the athletic apparel firm announced that Chief Executive John Donahoe will set to step down from the position next month. Elliott Hill, who previously spent more than three decades at Nike in various senior leadership roles, will succeed Donahoe.  

The leadership leadership change "will inject a much-needed sense of urgency, focusing on product innovation, storytelling/marketing, and rebuilding wholesale partnerships - areas that suffered under previous leadership resulting in material underperformance in profitability and shareholder returns," Deutsche Bank said.

American Airlines Group (NASDAQ:AAL ), meanwhile, is in talks to partner with Citigroup as its exclusive credit card issuer, ditching rival issuer Barclays, CNBC reported, citing unnamed sources.

(Peter Nurse, Ambar Warrick contributed to this article.)  

Source: Investing.com