Wall Street today: Wall Street slips as economic data fans fear rate hike
Losses in interest-sensitive hypercap growth stocks like Apple Inc, Microsoft Corp and Amazon.com Inc dragged technology and consumer discretionary stocks lower.
The final estimate of third-quarter US GDP showed gross domestic product growing at an annualized rate of 3.2%, higher than the previous estimate of 2.9%.
Meanwhile, a Labor Department report showed the number of Americans filing for state unemployment benefits rose to 216,000 last week, far below economists’ estimates of 222,000, giving the labor market remains tight.
“The GDP data beat a lot of expectations. There are concerns that the economy won’t give up too easily and it is sparking a fight that will likely force the Fed to remain hawkish and keep rates on hold. higher over the longer term,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
Wall Street’s main indexes posted their biggest daily gains in December on Wednesday, helped by upbeat quarterly earnings from Nike Inc and FedEx Corp, as well as improving confidence in the stock market. consumers and reduce inflation expectations.
Recession fears following a protracted US central bank rate hike have weighed on equities this year, with the benchmark S&P 500 index set for an annual decline of 19 .7%, the worst drop since the 2008 financial crisis. The Fed took on an aggressive tone last week at its policy meeting when it said it expected interest rates to stay higher. for a longer time, causing a sell-off across the stock markets.
Bets for the Fed to rise 25 basis points to 4.5%-4.75% in February were mostly unchanged at around 70% following Thursday’s data, despite expectations for interest rates at the end of the period. inched up 4.89% in May 2023.
At 9:50 a.m. ET, Dow Jones index The Industrial Average was down 331.19 points, or 0.99%, at 33,045.29, the S&P 500 was down 50.70 points, or 1.31%, at 3,827.74 and Nasdaq Aggregates fell 197.23 points, or 1.84%, at 10,512.14.
Shares of Micron Technology Inc fell 3.2% after the chipmaker forecast a larger-than-expected second-quarter loss, sending its peers tumbling.
Nvidia Corp, Qualcomm Inc, Advanced Micro Devices Inc and Intel Corp fell 3.0% to 5.1%, pushing the Philadelphia SE Semiconductor index 3% lower.
CarMax Inc slid 8.6% to the bottom of the S&P 500 after the used-car retailer halted share buybacks following an 86% drop in quarterly profit.
AMC Entertainment Holdings Inc fell 12.5% after the world’s largest movie theater chain said it would raise $110 million through a preferred stock sale.
Declining stocks outnumbered gainers by 5.83 to 1 on the NYSE and 3.28 to 1 on Nasdaq.
The S&P Index recorded no new 52-week highs and 9 new lows, while the Nasdaq recorded 27 new highs and 180 new lows.