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Wall St tumbles amid Fed tightening jitters, economic rumblings

Economy Sep 15, 2022 07:18PM ET
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2/2 © Reuters. FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly 2/2
 
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By Stephen Culp

NEW YORK (Reuters) - Wall Street ended sharply lower on Thursday, extending its losses in late afternoon trading as a raft of economic data failed to alter the expected course of aggressive tightening by the Federal Reserve amid growing warnings of global recession.

The sell-off gathered momentum toward the end of the session, with market leaders including Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) hitting the tech-laden Nasdaq hardest.

After the bell, FedEx Corp (NYSE:FDX) tumbled 14.5% after the package delivery company said its fiscal first-quarter results were hit by global volume softness and it withdrew its financial forecast, saying it expected further deterioration of business conditions.

FedEx's warning sent shares of rival United Parcel Service (NYSE:UPS) down 5.7% in extended trade.

Earlier, in Thursday's trading session, the benchmark S&P 500 closed a hair above 3,900, seen by many analysts as a key technical support level that has been tested several times over the past two weeks.

Interest rate-sensitive banks helped soften the blue-chip Dow's decline.

"It's been a difficult year and investors are wary," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "Until something changes the tie’s going to go the runner and that’s been the bear."

That scale tipped further to the bear side after the World Bank and the International Monetary Fund (IMF) warned of an impending global economic slowdown.

A mixed bag of economic data, led by better-than-expected retail sales, cemented the likelihood of another 75 basis-point interest rate hike from the Fed at the conclusion of next week's monetary policy meeting, as uncertainties simmered over where the central bank will go from there.

"The question is what’s going to happen in November?" said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "If the Fed really wants to handle it properly, it will be 50 basis-point drop in November, a 25 basis-point cut in December, and then they'll reassess."

While the retail print surprised to the upside, declining jobless claims reaffirmed the labor market's strength, and a drop in import prices supported the past-peak inflation narrative.

But a surprise drop in industrial production and a contraction of Atlantic region manufacturing provided fodder for economic pessimists.

None of the data appeared to change the calculus regarding Fed expectations. Financial markets have now fully priced in an interest rate increase of at least 75 basis points next Wednesday, with a one-in-five chance of a super-sized, 100-basis-point hike, according to CME's FedWatch tool.

U.S. railroads remained open after the Biden administration helped broker a tentative deal with unions to avert a strike, thereby avoiding a rail shutdown which would add to supply-chain pressures at the core of hot inflation.

Shares of railroad operators Union Pacific (NYSE:UNP) and Norfolk Southern (NYSE:NSC) outperformed the broader market.

Adobe (NASDAQ:ADBE) Inc tumbled after the company said it would buy Figma in a deal valued at about $20 billion.

The Dow Jones Industrial Average fell 173.27 points, or 0.56%, to 30,961.82, the S&P 500 lost 44.66 points, or 1.13%, to 3,901.35 and the Nasdaq Composite dropped 167.32 points, or 1.43%, to 11,552.36.

Nine the 11 major sectors of the S&P 500 ended the session in negative territory. Energy shares showed the largest percentage drop as the tentative rail agreement and demand concerns sent crude prices tumbling. [O/R]

Healthcare posted the biggest advance with an assist from health insurer Humana Inc (NYSE:HUM), whose 8.4% surge following its strong earnings forecast made it the top gainer in the S&P 500.

Adobe Inc was the S&P 500's biggest percentage loser, tumbling 16.8% after the company said it would buy Figma in a cash-and-stock deal that valued the online design startup at about $20 billion.

Declining issues outnumbered advancing ones on the NYSE by a 2.79-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 21 new lows; the Nasdaq Composite recorded 16 new highs and 206 new lows.

Volume on U.S. exchanges was 11.11 billion shares, compared with the 10.35 billion average over the last 20 trading days.

Wall St tumbles amid Fed tightening jitters, economic rumblings
 

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Comments (30)
Brad Albright
Brad Albright Sep 16, 2022 10:21AM ET
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The return to fair value so many have been screaming for.
Ken Roth
Ken Roth Sep 16, 2022 9:40AM ET
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FED should start to ease on the speeder..and send that signal,.the growth is dying and the development of new industries is already dead, meaning we are not inventing anything new, because nobody wants to take any chances in this market.
Hungry Fish
Hungry Fish Sep 16, 2022 8:29AM ET
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Financial pandemic is coming.
Fortnite Pobg
Fortnite Pobg Sep 15, 2022 7:25PM ET
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if this keeps going down, we differently we gonna see demonstrations, who wins more $ at the end it's clear only the Fed in this decline, Treasury keeps growing Year after year, Legal Terro...
Mitchel Pioneer
Mitchel Pioneer Sep 15, 2022 4:10PM ET
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Another "late trade" miracle criminally unfolds, as Wall Street laughs in the face of the US working class and hand places the BIGGEST INVESTMENT JOKE IN THE WORLD above 3,900.  The greatest financial FRAUD in history on display once again.  Predictable enough for ya?
Mike Sim
Mike Sim Sep 15, 2022 4:10PM ET
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Of course “savvy investors” would rush in to by the most grossly overvalued stocks in history. Defrauding the US in plain view in the joke of a “market.” Biggest laughing stock in the investment world. Assume the proper postion America!
Vito Tagliano
Vito Tagliano Sep 15, 2022 3:41PM ET
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It too investors losing tons in order “look beyond Fed”? QT will continue to 2024 in order reach close to Feds Target! In nutshell for people who don’t understand, Bulls going Lose until Mid 2024! Imo
jeanfrancois martin
jeanfrancois martin Sep 15, 2022 3:41PM ET
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thats amazing
Mitchel Pioneer
Mitchel Pioneer Sep 15, 2022 3:20PM ET
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Ready for the 30 minute, "late trade" round of FRAUD?
danish dynamite
danish dynamite Sep 15, 2022 3:20PM ET
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Now you Are happy under 3900
Samer Diab
Samer Diab Sep 15, 2022 3:20PM ET
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danish dynamite back to 3900 lol
James Hilsher
JCH007 Sep 15, 2022 3:11PM ET
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Blah, blah, blah...rigged market.
Sulabh Tripathi
Sulabh Tripathi Sep 15, 2022 2:23PM ET
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Kerry Ditto
Kerry Ditto Sep 15, 2022 1:59PM ET
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economy can tolerate, but stock can not. if stock market fails, economy will fail. fed is overdoing hiking already, so stock market is suffering. Fed should be careful here.
Sulabh Tripathi
Sulabh Tripathi Sep 15, 2022 1:59PM ET
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Economic data is REALITY... Stock market is MANIPULATION to a large extent...
Samir Patel
Samir Patel Sep 15, 2022 1:59PM ET
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yes, similar to how manipulative exercise is fundamental to health. Being high on free money is not good for health.
Samir Patel
Samir Patel Sep 15, 2022 1:59PM ET
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yes, similar to how manipulative exercise is fundamental to health. Being high on free money is not good for health.
Samir Patel
Samir Patel Sep 15, 2022 1:59PM ET
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yes, similar to how manipulative exercise is fundamental to health. Being high on free money is not good for health.
 
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