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U.S. stocks slip, crude slides as soft data feed recession jitters

Economy Aug 01, 2022 04:46PM ET
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2/2 © Reuters. FILE PHOTO - Pedestrians wearing protective masks, amid the coronavirus disease (COVID-19) outbreak, are reflected on an electronic board displaying various company’s stock prices outside a brokerage in Tokyo, Japan, February 25, 2022. REUTERS/Kim Kyung 2/2

By Stephen Culp

NEW YORK (Reuters) - Wall Street ended a three-day winning streak and crude prices plunged on Monday as economic data from the U.S., Europe and China showed demand weakening under inflation pressures, while the looming possibility of recession curbed risk appetite.

All three major U.S. indexes ended the choppy session modestly lower on the first day of August, on the heels of the S&P 500's and the Nasdaq's largest monthly percentage gains since 2020.

"It’s a consolidation," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "Investors are waiting to see if we get follow through or continue it's downward trend."

The Institute for Supply Management's (ISM) purchasing managers' index (PMI) showed U.S. factory activity decelerated in July to its lowest level since August 2020, but remained in expansion territory and long-running supply restraints appeared to be easing.

The report follows a swath of data from Europe and Asia that showed factory activity slowing or contracting in the face of dampened global demand and persistent inflation.

"There seems to be a comfort level that economy is slowing but demand isn't going to collapse," Carlson said. "Is the Fed going to take its foot off the gas pedal and stop raising rates?" That would appear to be what the market is watching."

"It's a tug-of-war between those that think the market has already fully discounted the economic slowdown and those that feel it hasn't," Carlson added.

The Dow Jones Industrial Average fell 46.73 points, or 0.14%, to 32,798.4, the S&P 500 lost 11.68 points, or 0.28%, to 4,118.61 and the Nasdaq Composite dropped 21.71 points, or 0.18%, to 12,368.98.

The energy sector pulled European stocks lower after disappointing data from the euro zone and China fueled fears of weakening demand and economic contraction.

The pan-European STOXX 600 index lost 0.19% and MSCI's gauge of stocks across the globe gained 0.06%.

Emerging market stocks lost 0.06%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.11% higher, while Japan's Nikkei rose 0.69%.

Crude prices headed lower as global factory data weighed on the demand outlook, and as market participants braced for this week's meeting of OPEC and other oil producers concerning world crude supply.

U.S. crude fell 4.73% to settle at 93.89$ per barrel, and Brent settled at $100.03 per barrel, down 3.94% on the day.

U.S. Treasury yields slid in choppy trading as economic data continued to hint at an impending slowdown which could prompt the Federal Reserve to slow the pace of interest rate increases.

Benchmark 10-year notes last rose 15/32 in price to yield 2.5893%, from 2.642% late on Friday.

The 30-year bond last rose 35/32 in price to yield 2.9206%, from 2.977% late on Friday.

The dollar touched its lowest level against the Japanese yen since June and the dollar index, which measures its performance against a basket of world currencies, was volatile in the wake of the PMI data.

The dollar index fell 0.47%, with the euro up 0.38% to $1.0257.

The Japanese yen strengthened 1.20% against the dollar to 131.64, while sterling was last trading at $1.2255, up 0.73% on the day.

Gold prices edged higher as the dollar softened, as investors looked to economic data for clues regarding the pace of interest rate hikes from the U.S. Federal Reserve.

Spot gold added 0.4% to $1,771.89 an ounce.

U.S. stocks slip, crude slides as soft data feed recession jitters
 

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Comments (10)
Marco cuevas
Marco cuevas Aug 01, 2022 7:21PM ET
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Recession jitters? Please people still buying cars, boats and going on vacations you call that a recession....Wallstreet big money wanted a red Monday since premarket, when they didn't get it by lunch time they released more sell the fear stories to put pressure on the market, nothing but bug money trying to cover their interests.
Jamie An
Jamie An Aug 01, 2022 6:18PM ET
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Thanks to J Powell Stagflation is coming. high inflation and economic slow down.
Marco cuevas
Marco cuevas Aug 01, 2022 1:33PM ET
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Fake financial journalism got what they wanted so Wallstreet big money will keep fun Elina to bloomberg, Reuters and all the other fake edit outlets...they got their red market today as they play with your emotioms, big money puts printing.
Brad Albright
Brad Albright Aug 01, 2022 1:33PM ET
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@Marcos THIS IS TRUE!!! I was at the meeting of the fake financial journalist last night at Bob's Country Bunker in Kokomo, and Walter Cronkite (Yes! He is alive and well!) said, "We want to keep fun Elina," and so we did.
nick cage
nick cage Aug 01, 2022 1:33PM ET
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Brad Albright None of that is true. You can't fund your Robinhood account after your horrible calls.
Marco cuevas
Marco cuevas Aug 01, 2022 12:57PM ET
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Sell the fear! You guys will print anything to get a red market comgrats.
James Wills
James Wills Aug 01, 2022 11:52AM ET
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Alright guys, recession over, nothing to see here.
Dave Jones
Dave Jones Aug 01, 2022 10:09AM ET
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Woops time to change the headline. Everything is awesome again!
Andrew Sim
Andrew Sim Aug 01, 2022 9:44AM ET
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prices only can goes up in world casino
Dave Jones
Dave Jones Aug 01, 2022 9:27AM ET
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All good news is good news. All bad news is good news. War is peace. Freedom is slavery. Ignorance is strength.
ge Kret
ge Kret Aug 01, 2022 8:26AM ET
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TSLA TSLA TSLA is going to double by this time next year. Why? because they are ramping up supplies to start the manufacturing of the Cybertruck….. and i cant wait!
Jurgen Daub
Jurgen Daub Aug 01, 2022 8:26AM ET
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if people still have the money to buy
Jamie An
Jamie An Aug 01, 2022 5:29AM ET
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Inflation peak out to 8% from 9%. but FR chair is talking 2% Balanced interest. Is it O.K. According to J Powell's plan he think it's OK. minus 7% of properties losses is OK. What are he talking about!
Brad Albright
Brad Albright Aug 01, 2022 5:29AM ET
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We wonder the same about your incomprehensible comments.
Jamie An
Jamie An Aug 01, 2022 5:29AM ET
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I don't care whether you understand or not.
Brad Albright
Brad Albright Aug 01, 2022 5:29AM ET
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Holly!
Jurgen Daub
Jurgen Daub Aug 01, 2022 5:29AM ET
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when properties rose 20+% yoy, nobody complained. funny people
nick cage
nick cage Aug 01, 2022 5:29AM ET
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He's telling you what they are going to do. Homes will go down by 15%. The US is a socialist state. They can't control supply but they can cut off money to the poor.
 
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