cloudy.png
Saturday November 26th, 2022 5:52PM

Stocks slide as strong economic data raises rate worries

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — A swift jump in Treasury yields rattled Wall Street on Wednesday, pulling stocks broadly lower at the start of another month in what's been a turbulent year for the market.

The S&P 500 ended 0.7% lower after an early morning gain quickly gave way to choppy trading. The Dow Jones Industrial Average slid 0.5% and the Nasdaq fell 0.7%.

Stocks began their slide immediately after the release of several reports on the U.S. economy, including one showing manufacturing growth was stronger last month than expected. That bolstered investors' expectations for the Federal Reserve to continue raising interest rates aggressively to slow the economy in hopes of reining in inflation.

“Investors are worried about the Fed meeting coming up, and because inflation is expected to remain stubbornly elevated the Fed probably won’t get away with front-end loading the rate tightening cycle and then pausing in the fall,” said Sam Stovall, chief investment strategist at CFRA.

The S&P 500 fell 30.92 points to 4,101.23. The Dow gave up 176.89 points to 32,813.23, after losing an early gain of 282 points. The Nasdaq composite slid 86.93 points to 11,994.46. It also ended in the red after giving up an early 1.3% gain.

Smaller company stocks also lost ground. The Russell 2000 index dropped 9.22 points, or 0.5%, to 1,854.82.

Daily market swings have become routine on Wall Street amid worries that too-aggressive rate hikes by the Fed may force the economy into a recession. Even if it can avoid choking off the economy, higher rates put downward pressure on stocks and other investments regardless. High inflation is meanwhile eating into corporate profits, while the war in Ukraine and business-slowing, anti-COVID-19 restrictions in China have also weighed on markets.

The Fed has signaled it may continue raising its key short-term interest rate by double the usual amount at upcoming meetings in June and July. Speculation built last week that the Fed may consider a pause at its September meeting, which helped stocks to rise. But such hopes diminished after Wednesday's manufacturing report from the Institute for Supply Management.

It showed U.S. manufacturing growth accelerated last month, contrary to economists’ expectations for a slowdown. A separate report said that the number of job openings across the economy ticked a bit lower in April but remains much higher, at 11.4 million, than the number of unemployed people.

Following the reports, traders are now betting on a 60% probability that the Fed will raise its benchmark short-term rate to a range of 2.25% to 2.50% at its September meeting. A week ago, the majority of bets was on a lower level, at a range of 2% to 2.25%, according to CME Group.

The yield on the two-year Treasury, which tends to follow expectations for Fed moves, jumped with those expectations. It rose to 2.66%, up from 2.56% just before the manufacturing report’s release.

Wednesday also marks the start of the Fed’s program to pare back some of the trillions of dollars of Treasurys and other bonds that it amassed through the pandemic. Such a move should put upward pressure on longer-term rates.

The 10-year Treasury yield rose to 2.92% from 2.84% just before the report’s release.

Airlines and stocks of other travel-related companies were some of Wednesday's biggest losers on Wall Street amid worries that inflation is slicing away their earnings.

Delta Air Lines, for example, said it expects to see fuel costs of $3.60 to $3.70 per gallon this quarter, up from its prior forecast of up to $3.35. Even outside of fuel, Delta said expenses could soar up to 22% above 2019 levels on a per-seat basis. That’s up from an earlier forecast of 17%,

Delta’s stock fell 5.2% even though it also said revenue trends are strengthening. With passengers paying higher fares, Delta said it may get a key revenue measure fully back to 2019 levels.

Norwegian Cruise Line and United Airlines each lost 4.5%.

On the winning side were energy stocks, which rose with the price of crude oil. ConocoPhillips gained 3%, and Exxon Mobil rose 1.9% as a barrel of benchmark U.S. crude rose 0.5% to settle at $115.26. Brent crude, the international standard, added 0.6% to $116.29.

The biggest gain in the S&P 500 came from Salesforce.com, which reported stronger profit for the latest quarter than analysts expected and raised its forecast for the year. Its stock rose 9.9%.

___

Veiga reported from Los Angeles.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Financial Services
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Verdicts reached in Johnny Depp, Amber Heard libel trial
The jury says it has reached a verdict in Johnny Depp’s $50 million libel lawsuit against his ex-wife Amber Heard, who testified that Depp physically and sexually assaulted her on multiple occasions
2:04PM ( 6 minutes ago )
West promises Ukraine more, better arms to fend off Russia
Western nations promised more and more advanced arms to bolster Ukraine’s defense as its troops battled a grinding Russian offensive that was closing in on capturing a key city in the east
1:48PM ( 21 minutes ago )
Hinckley to get full freedom 41 years after shooting Reagan
A federal judge has given his final blessing to full freedom for John Hinckley, the man who shot President Ronald Reagan in 1981
1:46PM ( 24 minutes ago )
Associated Press (AP)
Live updates | Zelenskyy lauds Polish military, refugee help
Ukraine’s President Volodymyr Zelenskyy is thanking Poland for its military support
1:06PM ( 1 hour ago )
Top EU official says Croatia ready to join the euro in 2023
European Commission President Ursula von der Leyen says Croatia is ready to join the group of countries using the euro single currency at the start of next year
12:58PM ( 1 hour ago )
Amelie Mauresmo: Women's tennis has less 'appeal' than men's
New French Open tournament director Amelie Mauresmo says nine of the 10 night session matches at Roland Garros this year involved men because women’s tennis currently has less “appeal.”
12:33PM ( 1 hour ago )
AP Business
Shanghai starts coming back to life as COVID lockdown eases
Traffic, pedestrians and joggers have reappeared on the streets of Shanghai as China’s largest city begins returning to normalcy amid the easing of a strict two-month COVID-19 lockdown that has drawn protests over its heavy-handed implementation
11:34AM ( 2 hours ago )
Live updates | Russia cites other hurdles for grain exports
Russian Foreign Minister Sergei Lavrov says that international sanctions are affecting Russia’s ability to export its own grain amid fears of a global food shortage
11:19AM ( 2 hours ago )
US job openings decline from record level but remain high
The white-hot demand for U.S. workers cooled a bit in April, though the number of unfilled jobs remains high and companies are still desperate to hire more people
11:13AM ( 2 hours ago )
AP Business - Economy
Asian shares mixed after stocks retreat on Wall Street
Shares are mixed in Asia after a wobbly day on Wall Street closed out a month buffeted by worries about a possible recession, inflation and rising interest rates
2:17AM ( 11 hours ago )
Stocks slip on Wall Street as messy May comes to a close
Stocks ended lower after another wobbly day on Wall Street Tuesday, closing out a rocky month
4:54PM ( 21 hours ago )
Most stocks fall on Wall Street as crude oil prices climb
U.S. stocks are falling Tuesday as Wall Street nears the end of a tumultuous month
11:38AM ( 1 day ago )
AP Business - Financial Markets
Wray: FBI blocked planned cyberattack on children's hospital
FBI Director Christopher Wray says his agents thwarted a planned cyberattack on a Boston children’s hospital that was to have been carried out by hackers sponsored by the Iranian government
10:07AM ( 4 hours ago )
Live updates | Germany's FM urges long-term Ukraine support
Germany’s foreign minister says the West must give Ukraine long-term support, and is defending the time it’s taking to deliver weapons systems to Kyiv
8:55AM ( 5 hours ago )
Live updates | Russia views 'negatively' US weapons supply
A Kremlin spokesman says Moscow “negatively” views U.S. plans to supply more weapons to Ukraine
7:49AM ( 6 hours ago )
AP Business - Industries
Biden plots inflation fight with Fed chair as nation worries
President Joe Biden and Federal Reserve Chairman Jerome Powell have met to plot a strategy to fight inflation
7:45PM ( 18 hours ago )
Biden to meet Fed chair as inflation bites US pocketbooks
President Joe Biden is set to meet with Federal Reserve Chairman Jerome Powell as soaring inflation takes a bite out of Americans’ pocketbooks
12:33PM ( 1 day ago )
Biden to meet Fed chair as inflation bites pocketbooks
President Joe Biden is set to meet with Federal Reserve Chairman Jerome Powell as soaring inflation takes a bite out of Americans’ pocketbooks
8:00AM ( 1 day ago )
AP Business - Financial Services
Verdicts reached in Johnny Depp, Amber Heard libel trial
The jury says it has reached a verdict in Johnny Depp’s $50 million libel lawsuit against his ex-wife Amber Heard, who testified that Depp physically and sexually assaulted her on multiple occasions
2:04PM ( 7 minutes ago )
Hinckley to get full freedom 41 years after shooting Reagan
A federal judge has given his final blessing to full freedom for John Hinckley, the man who shot President Ronald Reagan in 1981
1:46PM ( 24 minutes ago )
Jury reaches verdict in Johnny Depp, Amber Heard libel trial
The jury says it has reached a verdict in Johnny Depp’s $50 million libel lawsuit against his ex-wife Amber Heard, who testified that Depp physically and sexually assaulted her on multiple occasions
1:35PM ( 35 minutes ago )
Uvalde school police chief says he’s still cooperating
The school district police chief who served as on-site commander during last week’s deadly shooting in Uvalde, Texas, says he’s talking daily with investigators, contradicting claims from state law enforcement that he has stopped cooperating
1:32PM ( 38 minutes ago )
Wisconsin deputy not charged after new look at 2016 shooting
Two special prosecutors have decided not to charge a Wisconsin sheriff’s deputy in the fatal shooting of a man sleeping in a park
1:07PM ( 1 hour ago )