CNBC Business News Update - Market Open: Stocks Mixed, Dow Back Above 40,000, 2Q US Economic Growth Hotter Than Expected, Southwest To Begin Assigned Seating 7/25/24

Episode Date: July 25, 2024

From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Anchored and reported by CNBC's Jessica Ettinger.

I'm Jessica Ettinger, CNBC. Markets are split this morning. The Dow popping 182 points, almost a half percent. The Dow is back above 40,000. The S&P 500 index down four points, the NASDAQ down 114 points. That's about a half percent as investors still sell out of tech names. We ended up with a exceptionally overbought market here, huge rally into it. There's a lot of euphoria around AI and tech-related stocks in general, and earnings have to deliver. And AI specifically, the spending on it not only needs to be useful, but continue at a very brisk pace. And there's some questions around that at the moment. There's also questions about whether there's some overspend in the near term and that that might soften. Given their contribution to the overall index, it's no wonder you're bringing down the indexes with a bit of a shakeout. MRB partners Philip Colmar on CNBC. U.S. economic growth came in hotter than forecast in the second quarter. First look at second quarter GDP, better than expected, 2.8 percent, 2.8 percent. We're expecting 2 percent. CNBC's Rick Santelli,

the first look at GDP, gross domestic product, shows the U.S. economy solidly growing, even with interest rates holding higher. And looking deeper into that GDP report, some good news on inflation. There's some really good things in this report. A huge decline in the inflation numbers from the prior quarter that has to make the Fed think that it's at or close to a point that it could be cutting interest rates. And the consumption numbers are OK. Consumers seem to be holding up here. CNBC senior economics reporter Steve Leisman. Durable goods orders came in weaker than expected for June.

These are orders for things made to last a long time, but you take out aircraft orders and the number jumped, highlighting Boeing's struggles. The number of people who applied for unemployment benefits last week came in lower than the week before. Continuing claims dropped too. This is a measure of people who are still collecting unemployment checks over a period of time, and it can suggest that it's not taking people very long to find their next job. Southwest Airlines coming off a disappointing quarter and a profit plunge of more than 40 percent with a big change for flyers. Starting next year, Southwest Airlines, for the first time in its 57 years of flying, will be offering assigned seating.

It will also be offering, for the first time ever, business class seats with extra legroom. So you're looking at a differentiated cabin as opposed to everything that we've seen since 1967 on a Southwest Airlines plane, which is one type of seat throughout the entire plane, no assigned seating, clearly a response by the Southwest management to the pressure that they're facing from Elliott Management, the activist group, which has said, look, they must do better. Bob Jordan and Gary Kelly should be fired. That's the opinion of Elliott Management. CNBC's Phil LeBeau. Berkshire Hathaway has dumped out of $2.3 billion worth of Bank of America shares in a six-day sale. Warren Buffett's company now holds a 12% stake in that bank.

The trimming may be profit-taking. B of A shares up more than 25% for the year compared to about 14% for the S&P 500 index. Jessica Ettinger, CNBC.