cloudyn.png
Monday October 3rd, 2022 8:46PM

US stocks fall broadly as global central banks raise rates

By The Associated Press

Stocks fell on Wall Street in afternoon trading on Thursday and added to weekly losses for major indexes as central banks around the world hiked interest rates to fight inflation.

The S&P 500 fell 0.4% as of 3:53 p.m. Eastern. The Dow Jones Industrial Average recovered from an early slide to add 16 points, or 0.1%, to 30,200 and the Nasdaq fell 0.9%. Every major index is solidly on track for weekly losses.

The losses were broad and led by retailers, banks and industrial companies. Starbucks fell 3.9%, American Express dropped 3% and UPS slid 2.9%.

Health care stocks were among the few bright spots. Johnson & Johnson rose 2.2%.

Smaller company stocks fell more than the broader market in a sign that investors were worried about the economy. The Russell 2000 fell 1.9%.

Bond yields rose. The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, rose significantly to 4.11% from 4.02% late Wednesday. It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.69% from 3.51% from late Wednesday.

Investors are worried that the Fed could get even more aggressive on interest rates, but if prices stabilize that won't need to happen, said Barry Bannister, chief equity strategist at Stifel. It could take more than a year for that process to play out, he said.

“The question is, what's the patience level for both the Fed and the market,” he said.

Central banks in Europe and Asia raised interests a day after the Federal Reserve made another big rate hike and signaled that more were on the way.

Britain’s central bank raised its key interest rate by another half-percentage point. Switzerland’s central bank raised its benchmark lending rate by its biggest margin to date, 0.75 percentage points, and said it couldn’t rule out more hikes. Central banks in Norway and the Philippines also raised interest rates.

The Fed and other central banks are raising interest rates in to make borrowing more expensive. The goal is to slow economic growth enough to tame inflation, but not so much that economies slip into a recession. Wall Street is worried that the Fed may be pumping the brakes too hard on an already slowing economy, which makes steering into a recession more likely.

On Wednesday, Fed chair Jerome Powell stressed his resolve to lift rates high enough to drive inflation back toward the central bank’s 2% goal. Powell said the Fed has just started to get to that level with this most recent increase. The U.S. central bank lifted its benchmark rate, which affects many consumer and business loans, to a range of 3% to 3.25%. That is the fifth rate hike this year and up from zero at the start of the year.

The Fed also released a forecast known as a “dot plot” that showed it expects its benchmark rate to be 4.4% by year’s end, a full point higher than envisioned in June.

Companies are closing in on the end of the third quarter and preparing for the next big round of earnings reports, though some early reports have trickled out. Homebuilder Lennar rose 2.6% after reporting strong financial results for its fiscal third-quarter. Fellow homebuilder KB Home fell 4% after a warning about supply chain problems and a mixed financial report.

—-

AP Business Writers Joe McDonald and Matt Ott contributed to this report.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, 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.
Big bank CEOs face 2nd day of questioning from lawmakers
The CEOs of the nation’s biggest banks were in for a second day of tough questioning from lawmakers on Thursday, as Americans face inflation not seen since the early 1980s and a midterm election is only weeks away
10:49AM ( 13 minutes ago )
US stocks fall broadly as global central banks raise rates
Stocks fell on Wall Street and added to weekly losses for major indexes as central banks around the world hike interest rates to fight inflation
10:36AM ( 26 minutes ago )
Federer's final match comes in doubles alongside rival Nadal
Roger Federer and Rafael Nadal will team up in doubles at the Laver Cup on Friday in what Federer has announced will be the final match of his long and illustrious career
10:35AM ( 26 minutes ago )
Associated Press (AP)
Judge blocks Indiana abortion ban week after it took effect
An Indiana judge has blocked the state’s abortion ban from being enforced, putting the new law on hold as abortion clinic operators argue that it violates the state constitution
10:08AM ( 53 minutes ago )
Bank of England hikes rates but avoids more aggressive step
Britain’s central bank has raised its key interest rate by another half-percentage point, avoiding more aggressive steps to tame inflation that the U.S. Federal Reserve and other banks have taken
10:01AM ( 1 hour ago )
France's Macron seeks 'massive' boost for renewable energy
French President Emmanuel Macron has called for a “massive acceleration” of renewable energy development in France, including offshore wind farms and solar power
9:58AM ( 1 hour ago )
AP Business
Global markets waver after rate hikes in Europe, Asia, US
U.S. futures moved modestly higher and global stock markets sank after central banks around the world followed the U.S. Federal Reserve’s big interest rate hike with increases of their own in what’s become a global strategy intended to cool galloping inflation
8:37AM ( 2 hours ago )
Walmart, Target begin holiday early to ease inflation sting
Walmart and Target plan to begin offering deals and price matching offers earlier this year to keep up with Americans pressed by soaring inflation and looking for ways to take the sting out of holiday shopping
7:25AM ( 3 hours ago )
Turkish central bank lowers interest rate to 12%
Turkey’s central bank has delivered another interest rate cut and lowered the benchmark rate by 1 percentage point to 12%
7:21AM ( 3 hours ago )
AP Business - Economy
Ukraine’s Mariupol defenders, Putin ally in prisoner swap
Ukraine has completed a high-profile prisoner swap with Russia, the culmination of months of efforts to free many of the Ukrainian fighters who defended a steel plant in the port of Mariupol during a months-long Russian siege
5:37AM ( 5 hours ago )
Bank of England poised for another big interest rate hike
Britain’s central bank is under pressure make another big interest rate hike Thursday
4:42AM ( 6 hours ago )
Asia stocks follow Wall Street down as Fed fights inflation
Asian stock markets have followed Wall Street lower after the Federal Reserve delivered another big interest rate hike and raised its outlook for more to cool galloping inflation
1:47AM ( 9 hours ago )
AP Business - Financial Markets
UK government formally confirms lifting of fracking ban
Britain’s government has formally confirmed it is lifting a ban on fracking in England, arguing that the move will help boost the country’s energy security following Russia’s invasion of Ukraine
6:14AM ( 4 hours ago )
France wants to boost renewable energy, now lagging behind
President Emmanuel Macron is set to unveil a plan to boost renewable energy in France including offshore wind farms and solar power
5:59AM ( 5 hours ago )
Drowning island nations: 'This is how a Pacific atoll dies'
Heads of state from Tuvalu and the Marshall Islands have launched a “Rising Nations Initiative” as they race toward solutions to a rising ocean level that will make their countries all but uninhabitable in the coming decades
2:24AM ( 8 hours ago )
AP Business - Industries
US has sent $8.28 billion in pandemic funds to local lenders
On the same day the Federal Reserve gave a sobering report on the U.S. economy’s trajectory, administration officials highlighted how they have kept some of the nation’s smallest businesses afloat through the pandemic
5:23PM ( 17 hours ago )
Bank CEOs warn of 'daunting' challenges from inflation
The CEOs of the nation’s biggest banks appeared in front of Congress Wednesday and gave a dim view of the U.S. economy, reflecting the financial and economic distress many Americans are facing
4:42PM ( 18 hours ago )
Fed attacks inflation with another big hike and expects more
Intensifying its fight against high inflation, the Federal Reserve raised its key interest rate by a substantial three-quarters of a point for a third straight time and signaled more large rate hikes to come — an aggressive pace that will heighten the risk of an eventual recession
4:21PM ( 18 hours ago )
AP Business - Financial Services
Big bank CEOs face 2nd day of questioning from lawmakers
The CEOs of the nation’s biggest banks were in for a second day of tough questioning from lawmakers on Thursday, as Americans face inflation not seen since the early 1980s and a midterm election is only weeks away
10:49AM ( 13 minutes ago )
Federer's final match comes in doubles alongside rival Nadal
Roger Federer and Rafael Nadal will team up in doubles at the Laver Cup on Friday in what Federer has announced will be the final match of his long and illustrious career
10:35AM ( 26 minutes ago )
Ford shuffles management, seeks new global supply chain head
Ford is restructuring its vehicle development and supply chain operations, shuffling multiple executives just days after announcing that it would build up to 45,000 vehicles with parts missing due to shortages
10:33AM ( 29 minutes ago )
US to step up its criticism of Russia at UN Security Council
The United States and its allies plan to ramp up criticism of Russia for its war in Ukraine and press other countries to join in their forceful condemnations of the conflict
10:30AM ( 31 minutes ago )
More consumers buying organic, but US farmers still wary
It used to be that organic crops were an oddity, destined for health food stores or maybe a few farmers markets
10:28AM ( 34 minutes ago )