New York
CNN Business
—
A disastrous earnings report from Snap and less than inspiring results from Dow components American Express and Verizon weren’t enough to keep the Wall Street bulls at bay Friday. Stocks surged on hopes that the Federal Reserve may soon come to the rescue by slowing the pace of its rate hikes.
The Dow was up more than 550 points, or 1.9%, in midday trading, even as AmEx
(AXP) and Verizon
(VZ) both fell more than 5%.
Stocks opened lower but were quickly off to the races after a Wall Street Journal report indicated that even though the Fed is likely to raise rates by another three-quarters of a point in November, Fed members are debating whether to signal that a smaller hike could be in the cards in December.
Investors have started to become nervous that the Fed’s series of unprecedentedly large rate hikes could tip the economy into recession. And apparently some at the Fed are having doubts about the pace of rate increases as well.
Reuters reported that San Francisco Fed president Mary Daly said in a speech Friday that the central bank should not create an “unforced downturn” for the economy with too many massive rate hikes.
The Nasdaq and S&P 500 surged too, rising 1.4% and 1.7% respectively. That’s despite the fact that Snapchat’s parent company
(SNAP) plunged more than 30% following its earnings, news that sent shares of other social media companies spiraling downward as well. Facebook owner Meta fell more than 2% and Pinterest
(PINS) sank 8%.
Twitter
(TWTR) also fell 4%, due to reports that the Biden administration may closely scrutinize Elon Musk’s other businesses for a national security reasons before allowing Musk to buy Twitter
(TWTR). There were also reports suggesting massive layoffs ahead at Twitter
(TWTR) if the Tesla
(TSLA) and SpaceX CEO closes the deal.