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Wall Street ends down sharply; investors fret over economy

Economy Sep 29, 2022 04:33PM ET
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© Reuters. A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 27, 2022. REUTERS/Brendan McDermid
 
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By Noel Randewich and Ankika Biswas

(Reuters) - Wall Street ended sharply lower on Thursday on worries that the Federal Reserve's aggressive fight against inflation could hobble the U.S. economy, and as investors fretted about a rout in global currency and debt markets.

With tech heavyweights Apple Inc (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA) Corp slumping more than 4%, the Nasdaq sank to near its lowest level of 2022, set in mid-June.

The S&P 500 touched lows last seen in November 2020. Down more than 8% in September, the benchmark is on track for its worst September since 2008.

A sell-off in U.S. Treasuries resumed as Fed officials gave no indication the U.S. central bank would moderate or change its plans to aggressively raise interest rates to bring down high inflation. [US/]

Cleveland Fed President Loretta Mester said she does not see distress in U.S. financial markets that would alter the central bank's campaign to lower inflation through rate hikes that have taken the Fed funds rate to a range of 3.0% to 3.25%.

Data showed the number of Americans filing new claims for unemployment benefits fell to a five-month low last week as the labor market remains resilient despite the Fed's aggressive interest rate hikes.

"Good news is bad news in that today's job number again reiterates that the Fed has a long way to go," said Phil Blancato, head of Ladenburg Thalmann Asset Management in New York. "The fear in the marketplace is that the Fed is going to push us into a very deep recession, which will cause an earnings recession, which is why the market is selling off."

The most traded stock in the S&P 500 was Tesla (NASDAQ:TSLA) Inc, with $20.8 billion worth of shares exchanged during the session. The shares declined 6.8%.

Graphics: S&P 500 sheds $9 trillion in 2022 market rout - https://fingfx.thomsonreuters.com/gfx/mkt/dwvkroakgpm/Pasted%20image%201664454555732.png

The yields on many Treasuries, which are considered virtually risk-free if held to maturity, now dwarf the S&P 500's dividend yield, which recently stood at about 1.8%, according to Refinitiv Datastream.

The S&P 500 dropped 2.11% to end the session at 3,640.47 points.

The Nasdaq declined 2.84% to 10,737.51 points, while the Dow Jones Industrial Average declined 1.54% to 29,225.61 points.

Volume on U.S. exchanges was relatively heavy, with 11.6 billion shares traded, compared with an average of 11.4 billion shares over the previous 20 sessions.

All 11 S&P 500 sector indexes declined, led lower by utilities, down 4.06%, followed by a 3.37% loss in consumer discretionary.

Declining stocks outnumbered rising ones within the S&P 500 by an 11.6-to-1 ratio.

Meta Platforms ended down 3.7% after Bloomberg reported the Facebook (NASDAQ:META) owner froze hiring and warned employees of more downsizing to come.

CarMax Inc (NYSE:KMX) slumped nearly 25% after the used-car retailer missed expectations for second-quarter results, hurt by consumers cutting spending amid inflation, rising interest rates and higher car prices.

General Motors Co (NYSE:GM) and Ford Motor (NYSE:F) Co fell more than 5% each.

Airline carriers and cruise operators fell on canceled or delayed trips after Hurricane Ian hit Florida's Gulf Coast with catastrophic force.

American Airlines (NASDAQ:AAL), United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL) each lost more than 2%.

Cruise ship operators Norwegian Cruise Line (NYSE:NCLH) Holdings Ltd dropped 5.3% and Carnival (NYSE:CCL) Corp fell 6.8%.

The S&P 500 posted no new highs and 106 new lows; the Nasdaq recorded 14 new highs and 518 new lows.

Wall Street ends down sharply; investors fret over economy
 

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Comments (57)
perplexed76 .
perplexed76 . Sep 30, 2022 2:55AM ET
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"aggressive fight against inflation could hobble the U.S. economy" bla-bla... low rates made commodities  expensive for real economy because of market gamblers. Paper markets advanced
Kerry Ditto
Kerry Ditto Sep 29, 2022 7:53PM ET
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it is conceivable those big mouth talking heads are pathetic pawns of Big money powers. they don't know what they are talking about. simply parroting what they were told.
Kerry Ditto
Kerry Ditto Sep 29, 2022 6:46PM ET
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futures going higher aftermarket. it looks window dressing selloffs are over today. massive buybacks are inevitable tomorrow.
Stephen Fa
Stephen Fa Sep 29, 2022 6:46PM ET
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It is a volatile market right now $VIX
Guido Martini
Guido Martini Sep 29, 2022 6:04PM ET
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France, Germany and others are leashed under Washington control, a sadness situation in sinking dim outlook. If EU had included Ukraine and Russia in the block European Union, it would be a counterpoint to China and US, a new multipolar world, better impossible!
Chad Richer Than You
Chad Richer Than You Sep 29, 2022 3:13PM ET
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Trump 2024 🇺🇸🇺🇸
ottin nerner
ottin nerner Sep 29, 2022 3:13PM ET
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brandon for eternity!!!!
JMS Trader
JMS Trader Sep 29, 2022 3:13PM ET
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yess! trump in jail for 2024!
James Johannsen
James Johannsen Sep 29, 2022 3:13PM ET
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no one 2024 end the fed
lakes Tenn
lakes Tenn Sep 29, 2022 3:13PM ET
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jms, for what made up crime? for putting Americans first and calling out the corrupt media?
First Last
First Last Sep 29, 2022 3:13PM ET
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lakes Tenn   Trump has only ever put Trump 1st
shadab Ali
shadab Ali Sep 29, 2022 3:09PM ET
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I think America is a World leader but now I understand it's just a slave of Biden and FED
ottin nerner
ottin nerner Sep 29, 2022 2:58PM ET
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if you print money equivalent to 40% to the size of the economy, expect overheating of the economy.... by the way, commodity prices are below pre-invasion levels for three months, yet the inflation is still sky rocketing....
SquadW Name
SquadW Sep 29, 2022 2:58PM ET
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it doesnt work like that, dollar is very expensive now (despite 30% supply QE), commodities are low because dollar is high and theres no future demand (due to recession), the inflation happened months ago, its just you get the data now
Stephen Fa
Stephen Fa Sep 29, 2022 2:58PM ET
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Not all commodities are low again.
Chad Richer Than You
Chad Richer Than You Sep 29, 2022 2:53PM ET
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As Chad & Co make more money on a sliding $DXY
Philip Sorrells
Philip Sorrells Sep 29, 2022 2:31PM ET
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The republican lead fed is intent on driving the economy in the ditch
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First Last
First Last Sep 29, 2022 2:31PM ET
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Stephen Fa   And Powell is a Republican.
Warren Wesley
Warren Wesley Sep 29, 2022 2:31PM ET
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Biden turned economy into inflation; then placed responsible to fix in fed hands.never stopped the spend. fed funds rate rise is slow to fight inflation.
ottin nerner
ottin nerner Sep 29, 2022 2:31PM ET
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if powell is incompetent, why the great brandon reappointed him for another term???? it's like incompetent appoints another incompetent....
Stephen Fa
Stephen Fa Sep 29, 2022 2:31PM ET
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Chair Powell is in check by the governors
First Last
First Last Sep 29, 2022 2:31PM ET
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ottin nerner   Powell IS competent, but not to Trump because Powell didn't take Trump's stupid opinions on monetary policy and wasn't cowed by Trump's threat of firing.  Powell has been a technocrat as he should be, not a partisan agent, not a Democrat as retrumplicans have been insinuating.
David Beckham
David Beckham Sep 29, 2022 2:24PM ET
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The economy not that bad now but fed wants to make it worse
 
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