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Wall Street ends busy post-summer session in the red

Economy Sep 06, 2022 07:07PM ET
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© Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 8, 2022. REUTERS/Andrew Kelly
 
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By Carolina Mandl

NEW YORK (Reuters) - Wall Street's main indexes closed lower on Tuesday, the first session after the U.S. Labor Day holiday and summer vacations, as traders assessed fresh economic data in volatile trading.

A survey from the Institute for Supply Management (ISM) showed the U.S. services industry picked up in August for the second straight month amid stronger order growth and employment, while supply bottlenecks and price pressures eased.

However, numbers from S&P Global (NYSE:SPGI) showed the services sector Purchasing Managers' Index fell short of flash estimates for August.

A stronger-than-expected reading on the U.S. services sector fueled expectations that the Federal Reserve will keep raising interest rates to tame inflation.

"The Fed has relegated us to being very data dependent, so every piece of information that comes out investors are going to look not only at the absolute level, but try to infer what that means for when the Fed meets," said Carol Schleif, deputy chief investment officer at BMO Family Office.

"One of the things that is disconcerting to investors is that there's really little to propel markets either up solidly or down solidly," she added.

Concerns over the supply of energy to Europe and how COVID-19 lockdowns will impact China's economy also drove markets down on Tuesday, said Shawn Cruz, head trading strategist at TD Ameritrade. "A lot of uncertainty and volatility is not coming from the U.S.; it's actually coming from overseas."

The tech-heavy Nasdaq suffered its seventh consecutive day of losses, its longest losing streak since November 2016.

Rate-sensitive shares of Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT) fell about 1% as benchmark U.S. Treasury yields rose to their highest levels since June. Apple Inc (NASDAQ:AAPL), which will launch new iPhones next Wednesday, lost 0.8.

Traders see a 74% chance of a third consecutive 75-basis-point rate hike at the Fed's policy meeting later this month, according to CME's FedWatch Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html?redirect=/trading/interest-rates/fed-funds.html.

The focus will be on Fed Chair Jerome Powell's speech on Thursday as well U.S. consumer price data next week for clues on the path of monetary policy.

Markets started September on a weak note, extending a slide that started at the end of August, as hawkish comments from Fed policymakers and data signaling U.S. economic momentum raised fears of aggressive interest rate hikes.

The S&P is down nearly 18% so far this year, while the Nasdaq has shed over 26% as rising interest rates hurt megacap technology and growth stocks.

Among the major S&P sectors, energy and communication services were the worst performers, while defensive utilities and real estate rose.

The Dow Jones Industrial Average fell 173.14 points, or 0.55%, to 31,145.3; the S&P 500 lost 16.07 points, or 0.41%, to 3,908.19; and the Nasdaq Composite dropped 85.96 points, or 0.74%, to 11,544.91.

The CBOE Volatility index, known as Wall Street's fear gauge, touched a near two-month high of 27.80 before closing at 26.91.

Bed Bath & Beyond Inc (NASDAQ:BBBY) tumbled 18.4% after Chief Financial Officer Gustavo Arnal fell to his death from New York's Tribeca skyscraper.

Digital World Acquisition Corp fell 11.4% after Reuters reported the blank-check acquisition firm that had agreed to merge with former U.S. President Donald Trump's social media company failed to secure enough shareholder support for an extension to complete the deal.

Volume on U.S. exchanges was 10.71 billion shares, compared with the 10.46 billion average for the full session over the last 20 trading days.

Declining issues outnumbered advancers on the NYSE by a 2.46-to-1 ratio; on Nasdaq, a 2.12-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 29 new lows; the Nasdaq Composite recorded 19 new highs and 317 new lows.

Wall Street ends busy post-summer session in the red
 

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Comments (27)
James Hilsher
JCH007 Sep 07, 2022 1:07AM ET
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"...as traders assessed fresh economic data in volatile trading." What a crock! Human traders have absolutely nothing to do with it. Algo computers, and those that control them, rule the market. Us living and breathing investors are just along for the ride.
Kerry Ditto
Kerry Ditto Sep 06, 2022 11:51PM ET
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soft landing accomplishing, market to go thru the roof
Hungry Fish
Hungry Fish Sep 06, 2022 11:18PM ET
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Fed make America Great again.
Marco cuevas
Marco cuevas Sep 06, 2022 7:19PM ET
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Once retail gets in wallstreet will pounce on your puny gains.
Buy And Sell
Buy And Sell Sep 06, 2022 2:48PM ET
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Big crash is coming, sell everything or go broke!
John Lakran
John Lakran Sep 06, 2022 2:48PM ET
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News flash FAANGS alone have lost more than $3Trillion this year. 08-09 total market value lost was 7.4 Trillion we are past that already in 2022. Crash is happening right now. Keep selling im buying
Casador Del Oso
Casador Del Oso Sep 06, 2022 2:42PM ET
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2YR yield over 3.5%. Once it hits 4.0% small tech companies carrying debt will have big troubles.
John Lakran
John Lakran Sep 06, 2022 2:42PM ET
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Are heggies still shorting the 2 year at the greatest amount in history? I read it a month or two ago but havent found it again. I dont think it will stay there long if it hits 4%+ imo they are sucking retail in just like oil before that tanked
Surf Photography
Surf Photography Sep 06, 2022 2:28PM ET
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Lets go brandon ! Inflation record, recession , house market broken. Very well ! U peopple going to suffer , and bussines to. But it is for your well. Hahahah
Brad Albright
Brad Albright Sep 06, 2022 2:28PM ET
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For my well? Oh, no!
Erikke Evans
Erikke Sep 06, 2022 2:12PM ET
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The Fed is always behind the curve, making this a long drawn out recession.
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Erikke Evans
Erikke Sep 06, 2022 2:12PM ET
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First Last The Fed entered the prediction game the moment they claimed inflation was transitory.  If they would have matched rates as inflation rose asset markets would probably not be in this mess.
First Last
First Last Sep 06, 2022 2:12PM ET
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Erikke Evans  I already said "the Fed's expertise is in free market economics".  The "transitory" thing did not account for Russia's military aggression nor China's medical shutdowns.
Erikke Evans
Erikke Sep 06, 2022 2:12PM ET
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First Last You're the one who claimed they should stay out of the speculation/prediction business.  They failed to do that.  When was the last time the Fed kept us out of a recession by manipulating interest rates.?  Never.  Assuming that it's actually possible leads to no other conclusion than the fact that the Fed is inept and asleep at the wheel.
Scot House
Scot House Sep 06, 2022 2:12PM ET
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First Last you might eant to go back and look at those numbers again. Check them eyes or learn how to reqd.
First Last
First Last Sep 06, 2022 2:12PM ET
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Scot House   My #s are correct.  If you wanna dispute them, be more specific.
Gary Moses
Gary Moses Sep 06, 2022 2:05PM ET
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4 weeks of Gains a Month Ago, will vanish in another week at the Rate things are going.
Matt luck
Matt luck Sep 06, 2022 1:54PM ET
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It's already all priced in too good
 
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