Wall St. slips as labor market data fuels Fed worries

Wall St. slips as labor market data fuels Fed worries
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  • Procter and Gamble read after product cost pressure warning
  • Netflix fell ahead of quarterly results
  • Dow down 0.76%, S&P 500 down 0.76%, Nasdaq down 0.96%

NEW YORK, Jan 19 (Reuters) – U.S. stock indexes edged lower on Thursday after renewed concerns that the Federal Reserve will continue its path of aggressive rate hikes that could tip the economy into recession.

A report from the Department of Labor appears weekly unemployment claim was lower than expected, indicating that the labor market remains tight despite the Fed’s efforts to reduce demand for workers.

Expectations that the central bank will further reduce the size of its interest rate hikes at its policy announcement next month were unchanged on the report.

Investors are looking for signs of weakness in the labor market as a key element needed to slow the Fed’s policy tightening moves.

unemployment claim

Other data showed that manufacturing activity in the Mid-Atlantic region eased again in January, while Commerce Department data confirmed that the housing market continued to slow.

“What we’re seeing is the market is sinking into uncertainty so the impact of the news is diminishing and what we’re seeing today is really a continuation of that,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. , an independent broker-dealer in Waltham, Massachusetts.

“The fact that we’re not seeing any response says there’s a lot of bad news.”

Dow Jones Industrial Average (.DJI) The S&P 500 fell 252.4 points, or 0.76%, to 33,044.56. (.SPX) The Nasdaq Composite lost 30.01 points, or 0.76%, to 3,898.85. (.IXIC) It fell 104.74 points, or 0.96%, to 10,852.27.

Traders work at the post where Carvana Co. is traded on the floor of the New York Stock Exchange (NYSE) in New York City, Dec. 7, 2022. REUTERS/Brendan McDermid

Recent comments from Fed officials continue to highlight the disconnect between the central bank’s terminal rate and market expectations

Boston Fed President Susan Collins Echoing comments from other policymakers to support the case for interest rates to rise above 5%.

But stocks moved lower in their session after the Fed vice chair Lele Brainard Dr The Fed is still “investigating” the level of interest rates that will be necessary to control inflation.

However, markets see a terminal rate of 4.89% by June and have priced in a 25-basis point rate hike from the US central bank in February, with rates cut in the latter half of the year. .

The S&P 500 and Dow both fell for a third straight session, their longest losing streak in a month.

On the earnings front, Procter & Gamble Co. (PG.N) decreased by 2.11% After warning Product price pressure profits, despite raising its full-year sales forecast.

Analysts now expect earnings from S&P 500 companies to decline 2.8% in the fourth quarter, compared with a 1.6% decline earlier in the year, according to Refinitiv data.

Netflix Inc (NFLX.O) It closed 3.23% lower ahead of results scheduled for release after the closing bell on Thursday. But the stock has since gained 3.33% Posting subscribers earn The departure of co-founder Reed Hastings as chief executive for the quarter and in the role of executive chairman.

The number of issues advanced to the NYSE decreased by a 1.49-to-1 ratio; On the Nasdaq, the ratio is 1.70-to-1 in favor of bearers.

S&P 500 posts 1 new 52-week high and 3 new lows; The Nasdaq Composite recorded 46 new highs and 33 new lows.

Reporting by Chuck Mikolaczak, Editing by Deepa Babington

Our values: Thomson Reuters Trust Policy.

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