The New York Stocks fell after Thursday’s open on concern as mixed indicators and fresh comments from Fed members pushed bond rates higher.
The Dow Jones index fell 0.73%, the Nasdaq, with heavy tech coloring, lost 1.18% and the broader S&P 500 index 1.11% at around 16:15 GMT .
The day before, the Dow Jones index had lost 0.12% to 33,553.83 points, the Nasdaq 1.54% to 11,183.66 points and the broader S&P 500 index 0.83% to 3,958. 79 points.
The Federal Reserve “isn’t doing the stock market any favors this morning,” complained Briefing.com’s Patrick O’Hare.
The St. Louis, Missouri, Fed chairman threw the stone in the pond Thursday in a speech questioning whether interest rate hikes so far have brought them into “a tight enough zone.”
This assumes the continuation of monetary tightening as investors hoped the Fed would ease.
Another official, Mary Daly of the San Francisco Fed, meanwhile warned that overnight rates will likely need to be raised by another full percentage point, as they currently hover between 3.75% and 4%. You have also clearly ruled out a pause in rate hikes for now.
“These remarks echo market participants’ growing fears that there will be further monetary tightening and an economic slowdown, which would not be good for corporate earnings prospects,” summarized Patrick O’Hare.
In the bond market, yields on 10-year Treasuries rose to 3.78% from 3.69% the day before, which depressed equities.
Several indicators also showed a slowdown in activity on Thursday.
Construction of new homes in October decreased by 4.2% and building permit applications also decreased by 2.4%, which rules out an immediate improvement in the market as the rise in mortgages, in the wake of that in rates Fed, scare the buyers.
Additionally, manufacturing activity in the highly industrialized Philadelphia region was in the red in November for the third consecutive month, even falling to its lowest level since May 2020, according to data from the regional branch of the Fed.
The general index fell to -19.4 points, against -8.7 in October, well below zero, as in September and October, which means that activity is contracting.
On the rating, all sectors of the S&P are in the red, primarily communication services, materials and consumer discretionary goods which drop by almost 2%.
Amazon, Meta (Facebook) lost more than 2%, Tesla and Google also lost nearly 2%, while Netflix fell 4.71% and Disney nearly 3%. In China, Alibaba announced nearly 3 billion euros in quarterly losses due to the Covid-related economic slowdown.
Cruise lines, which fall into the consumer discretionary sector, led the decline with Norwegian Cruise (-7.85%), Royal Caribbean (-3.49%) while travel sites also drank the cup like Expedia ( -3.16%) or Booking (- 5.11%).
Macy’s department stores performed well (+11.87%) which, despite falling sales and profits in the 3rd quarter, raised their forecasts for the year thanks to the promotions which made it possible to destock but also thanks to the retention of wealthy customers on high levels. final brands.
The dollar rose 0.55% against the euro to 1.0338 dollars to one euro.