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Wall Street Opens Lower on Evergrande, Fed Worries; Dow Down 70 Pts

Stock MarketsSep 24, 2021 09:39AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened lower on Friday, unsettled by fresh comments from the Federal Reserve about the pace of monetary policy tightening, and by doubts about China Evergrande, the real estate developer teetering on the brink of default.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was down 68 points, or 0.2% at 34,696 points. The S&P 500 was down 0.3% and the Nasdaq Composite was down 0.5%. That leaves the Dow on course for a narrow weekly gain, but the S&P and Nasdaq on course for a loss. 

Before trading began, Cleveland Federal Reserve President Loretta Mester spelled out in detail what Fed Chair Jerome Powell had hinted at in his press conference on Wednesday, namely that the Fed is likely to run down its bond purchases relatively quickly from November, and may well raise interest rates by the end of next year. Mester said in a speech that the U.S. economy had met the conditions necessary to allow monetary policy to be tightened.

"I support starting to dial back our purchases in November and concluding them over the first half of next year," Mester said in remarks prepared for delivery to the Ohio Bankers League. Mester also warned of 'froth' in both equity and housing markets in the U.S. New home sales data for August released at 10 AM came out slightly stronger than expected, adding to evidence of sustained housing market strength that was also seen in housing starts and building permit data this week. 

Nike (NYSE:NKE) stock stood out in early trading, falling by 5.6%, the most in six months, after the company said supply chain disruptions threaten its near-term outlook. The company has lost 10 weeks of production from its factories in Vietnam due to Covid lockdowns, and it also faces big delays in getting shipping containers across the Pacific. That's raising doubts as to what shape inventories will be in when the key holiday season starts. Under Armour (NYSE:UAA) stock fell 2.6% and Adidas ADRs (OTC:ADDYY) fell 3.2%, but such problems are hardly unique to sportswear makers.

By contrast, Costco (NASDAQ:COST) stock rose 2.2% after a strong quarterly update that featured renewed hoarding of essentials by customers in response to the summer's Delta-variant Covid-19 wave.

China worries also weighed on sentiment in early trading after reports that the beleaguered Evergrande had failed to pay interest to all holders of one of its dollar bonds by Thursday's deadline, technically tipping it into default. The company still has a 30-day grace period to meet its commitments, but it also has more interest and principal payments due in that time. The growing sense of risk around Chinese asset and Chinese markets was reinforced as HNA Group, a conglomerate that also overreached itself with debt-fueled growth, said its chairman and CEO had both been arrested in connection with suspected criminal activity. 

Alibaba ADRs (NYSE:BABA) fell 3.6%, after the e-commerce giant sold its minority stake in a state-controlled broadcaster, reportedly under pressure from regulators. 

 

Wall Street Opens Lower on Evergrande, Fed Worries; Dow Down 70 Pts
 

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Comments (13)
ZS Beck
ZS Beck Sep 24, 2021 11:19AM ET
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Fed worries ? Again?Just print more and rekax…
michael engel
michael engel Sep 24, 2021 10:50AM ET
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Biden stabbed WB in the back.
Millennial Metals
Millennial Metals Sep 24, 2021 10:18AM ET
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Joe Biden is destroying our country
timothy patterson
timothy patterson Sep 24, 2021 10:18AM ET
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explain your comment, instead of just throwing it out there
timothy patterson
timothy patterson Sep 24, 2021 10:18AM ET
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explain your comment, instead of just throwing it out there
Casador Del Oso
Casador Del Oso Sep 24, 2021 10:18AM ET
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timothy patterson read the news
Mitchel Pioneer
Mitchel Pioneer Sep 24, 2021 10:13AM ET
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The Friday FRAUD is unleashed on the US working class, as the US Ponzi Scheme, biggest investment JOKE in the world, as predicted, will send America into another weekend with a financial knife in their back.  Miracles abound in the laughingstock of the financial world.
Alan Goldblatt
Alan Goldblatt Sep 24, 2021 10:13AM ET
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Where do you go invest your money? Criticism is easy. Providing a solution is not.
neang aee 냥에
neang aee 냥에 Sep 24, 2021 10:10AM ET
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HEY MAN, YOU SAID FED IS ON OUR SIDE TO GO FURTHER
Md Masud
Md Masud Sep 24, 2021 10:10AM ET
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masud
dav lo
dav lo Sep 24, 2021 10:08AM ET
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yesterday relief, wed fri worry. u psyco, if u so mental illness, go somewhere else instead of causing turbulence to the market
Kaveh Sun
Kaveh Sun Sep 24, 2021 10:08AM ET
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News need to do that for big boys to make big money from hft
Sarunas Simkus
Sarunas Simkus Sep 24, 2021 10:02AM ET
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I don't get it, so Loretta Mester repeaded exactly what Jerome Powell said on Wednesday and markets started to react now?
Millennial Metals
Millennial Metals Sep 24, 2021 9:57AM ET
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Higher interest rates coming :)
thoufi ke
thoufi ke Sep 24, 2021 9:50AM ET
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Hen Hen
Hen Hen Sep 24, 2021 9:46AM ET
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boay
Abba lawan
Abba lawan Sep 24, 2021 9:46AM ET
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Hello
Diallo Alou
Diallo Alou Sep 24, 2021 9:46AM ET
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travail
 
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