Stocks are opening broadly lower on Wall Street, putting the market on track for another week of sizable losses, as a stark warning from FedEx about rapidly worsening trends in the economy gave investors more to worry about. FedEx lost a quarter of its value early Friday after saying a sharp dropoff in its business, particularly in Asia and Europe, worsened in recent weeks. Other transportation companies also fell, though not as much. Markets were already on edge because of stubbornly high inflation as well as the higher interest rates being used to fight it, which will slow the economy.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Barring an enormous rally, Wall Street is headed for another losing week as grim news from corporate bellwethers and higher-than-expected U.S. inflation data continue to weigh on markets.
Futures for the Dow Jones Industrial Average slid 0.9% Friday and the S&P 500 tumbled 1%, compounding losses from earlier in the week.
Four interest rate hikes by the Federal Reserve this year have done little to tamp down four-decade high inflation and economists expect a third straight jumbo increase of three-quarters of a point when the central bank's leaders meet next week.
Reports this week from the government showed that prices for just about everything but gas are still rising, the job market is still red-hot and consumers continue to spend, all of which give ammunition to Fed officials who say the economy can tolerate more rate hikes.
Wall Street’s decline indicates “no sign of relief for risk sentiments” while the job market data “provided the go-ahead for further tightening” in monetary policy, Yeap Jun Rong of IG said in a report.
On top of that, FedEx said Thursday it's shuttering storefronts and corporate offices while putting off new hires in a belt-tightening drive brought on by declines in its global package delivery business.
FedEx warned it will likely miss Wall Street’s profit target for its fiscal first quarter and said it expects business conditions to weaken further.
Its stock is down more than 20% before the opening bell Friday and it's dragging other shipping and delivery companies with it. UPS tumbled almost 6% in premarket and Amazon fell 2.5%.
The chief financial officer of another corporate bellwether, General Electric, said Thursday that the industrial giant was still bogged down by supply chain problems that were raising costs. Carolina Dybeck Happe told a Morgan Stanley conference Thursday that the company was having difficulties getting products to customers.
GE shares fell more than 4% before the bell Friday.
Huntsman Corp. shares tumbled 6% after the consumer and industrial goods maker lowered its third-quarter profit guidance.
For the week, the benchmark S&P 500 was down 4.1% after the close Thursday. The Dow has lost 3.7% and the Nasdaq declined 4.6%.
On Tuesday, the government reported U.S. consumer prices rose 8.3% from a year earlier and 0.1% compared with July.
The overall figure was down from June’s 9.1% peak. But core inflation, which strips out volatile food and energy prices to give a clearer picture of the trend, rose to 0.6% over the previous month, up from July’s 0.3% increase.
Traders worry rate hikes by the Federal Reserve and central banks in Europe and Asia to control price rises might derail global economic growth. Two of the Fed’s rate hikes this year have been by 0.75 percentage points, triple its usual margin. Traders expect a similar increase this month.
Fed chair Jerome Powell said in August that rates would stay elevated for some time until the U.S. central bank is sure inflation is under control.
In Europe at midday, the FTSE 100 in London was essentially unchanged, the DAX in Frankfurt shed 1.5% and the CAC 40 in Paris sank 1.1%.
In Asia, the Shanghai Composite index lost 2.3% to 3,126.39 after data showed Chinese consumer and factory activity improved in August but were still weak. Housing sales fell 30% from a year earlier under pressure from a government crackdown on debt.
The Nikkei 225 in Tokyo sank 1.1% to 27,567.65 and the Hang Seng in Hong Kong retreated 0.9% to 18,761.69.
The Kospi in Seoul shed 0.8% to 2,382.78 and Sydney's S&P-ASX 200 was 1.5% lower at 6,739.10.
India's Sensex retreated 1.7% to 58,897.88. New Zealand and Southeast Asian markets declined.
In energy markets, benchmark U.S. crude gained 85 cents to $85.95 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.38 on Thursday to $85.10. Brent crude, the price basis for international oil trading, rose $1.25 to $92.09 per barrel in London. It lost $3.26 the previous session to $90.84.
The dollar declined to 143.13 yen from Thursday's 143.49 yen. The euro fell to 99.58 cents from 99.91 cents.
AP Business Writer Joe McDonald contributed to this story from Beijing.