© Reuters. FILE PHOTO: A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, US, September 13, 2022. REUTERS/Andrew Kelly
Written by Stephen Kolb
NEW YORK (Reuters) – Wall Street closed sharply lower on Thursday to extend losses in late afternoon trading as a batch of economic data failed to alter the expected course of a severe tightening by the Federal Reserve amid growing warnings of a global recession.
Selling gained momentum at the end of the session, including market leaders Microsoft Corporation (NASDAQ :), Apple Inc (NASDAQ :), and Amazon.com Inc (NASDAQ 🙂 hit the tech-laden Nasdaq hard.
After the bell, FedEx Corp. (NYSE) fell 14.5% after the parcel delivery company said its first-quarter financial results were affected by weak global volumes and withdrew its financial forecast, saying it expected a further deterioration in business conditions.
Send FedEx Stock Competitor Warning United Parcel The Service Index (NYSE) fell 5.7% in expanded trade.
Earlier, in Thursday’s trading session, the major index closed above 3900, which many analysts see as a key technical support level that has been tested several times over the past two weeks.
Interest rate-sensitive banks helped mitigate the Dow’s decline.
“It’s been a tough year and investors are concerned,” said Matthew Keator, managing partner at Keetor Group, a wealth management firm in Lenox, Massachusetts. “Until something changes, the tie will go to the runner and that’s the bear.”
This measure is tilted to the downside after the World Bank and International Monetary Fund warned of an impending global economic slowdown.
A mixed batch of economic data, led by better-than-expected retail sales, boosted the prospect of another 75 basis point interest rate hike from the Federal Reserve at the conclusion of next week’s monetary policy meeting, as doubts mount over the whereabouts of the central bank. It will go from there.
“The question is what will happen in November?” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “If the Fed really wanted to get it right, it would be a 50 basis point drop in November, a 25 basis point cut in December, and then they would reassess.”
While the retail sales report surprised the upside, lower jobless claims reaffirmed the strength of the labor market, and lower import prices supported the inflation narrative at its last peak.
But the sudden drop in industrial production and shrinking manufacturing in the Atlantic region provided fodder for economic pessimists.
None of the data appears to change the calculus regarding the Fed’s outlook. Financial markets have now priced the entire rate hike at at least 75 basis points next Wednesday, with a one in five chance of a significant 100 basis point hike, according to CME’s FedWatch Tool.
US railroads remained open after the Biden administration helped broker an initial deal with unions to avert a strike, and thus avoid a rail shutdown that would add to supply chain stresses at the heart of hot inflation.
Railway operators shares Union Pacific (NYSE 🙂 and Southern Norfolk (NYSE: Outperforming the broader market.
Adobe (NASDAQ:) Inc backed down after the company said it would buy Figma in a deal valued at about $20 billion.
The index fell 173.27 points, or 0.56%, to 30961.82, the Standard & Poor’s 500 lost 44.66 points, or 1.13%, to 3901.35 points, and it fell 167.32 points, or 1.43%, to 11,552.36.
Nine major sectors 11 in the S&P 500 ended the session in negative territory. Energy stocks showed the biggest percentage decline as the interim rail agreement and demand concerns dragged down crude oil prices. [O/R]
Health care recorded the largest progress with the help of the health insurance company Humana you (NYSE:), whose 8.4% rise on strong earnings expectations made it the top gainer in the S&P 500.
Adobe Inc was the biggest percentage loser for the S&P 500, dropping 16.8% after the company said it would buy Figma in a cash-and-stock deal valuing the online design startup at about $20 billion.
Low issues outnumbered advanced issues on the New York Stock Exchange by 2.79 to 1; On the Nasdaq, the ratio was 1.35 to 1 in favor of declining stocks.
S&P 500 not hit 52-week highs and 21 new lows; The Nasdaq Composite recorded 16 new highs and 206 new lows.
Volume on US stock exchanges reached 11.11 billion shares, compared to an average of 10.35 billion over the last 20 trading days.
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