Stocks waver on Wall Street following a 4-day losing streak
NEW YORK Wall Street closed a wobbly trading day with more losses Wednesday due to a slide by technology companies. Treasury yields also fell broadly.
The S&P 500 lost 0.2%, marking its fifth consecutive loss. The Nasdaq composite which is heavily populated with tech stocks, dropped 0.5% while the Dow Jones Industrial Average was barely in the green.
Treasury yields declined significantly. The yield on the 10-year Treasury, which influences mortgage rates, slid to 3. 42% from 3. 53% late Tuesday. The Treasury yield on two-years, which tends be to track market expectations for future Federal Reserve action, fell to 4. 27% from 4.36%.
Investors have been struggling to keep up with the lack of news ahead for updates on inflation and consumer sentiment later in the week and the Federal Reserve’s meeting next Wednesday. Wall Street’s biggest concerns are still inflation, the Fed’s aggressive interest-rate increases, and recession worries.
“Investors continue to position for rates to go higher for longer,” Sam Stovall, chief investment strategist at CFRA.
The S&P 500 dropped 7. 34 points to 3,933.92. The Nasdaq fell 56. 34 points to 10,958.55. The Dow achieved a 1. 58 point gain, essentially flat, at 33,597.92.
Small stock companies also fell. The Russell 2000 Index fell to 5. 67 points, or 0.3%, to 1,806.90.
Every major index is headed for weekly losses.
Technology and communication services stocks were the biggest weights on the benchmark S&P 500 index. Apple dropped 1.4%, and Google parent Alphabet fell 2.1%.
Healthcare stocks were among the few bright spots. Pfizer rose 1.1%.
Investors recognized several companies for their solid earnings reports. After reporting strong results, Campbell Soup saw a 6% increase.
Carvana plunged 42.9%, its biggest single-day drop on record, after analysts at Wedbush Securities warned that the used vehicle chain’s bankruptcy risk is rising. The company has lost 98% of its value since the beginning of the year.
U.S. crude oil prices fell 3%, settling at $72. 01 per gallon, the lowest price this year. Economic updates this week could provide investors with more insight into the path of inflation and how the Fed will continue to fight high prices.
The U.S. will release data about weekly unemployment claims on Thursday. The Fed has had difficulty taming inflation because the strong job market has been a key area of an otherwise slowing economy.
Friday’s government report on wholesale prices will give more information about how inflation is affecting businesses. Friday will see the release by the University of Michigan of a December survey of consumer sentiment.
Although they don’t move markets, these reports are getting a lot of attention because they are the last data dumps before next week’s Fed meeting.
The central bank will likely raise interest rates by half a percentage point at its next meeting. It has raised its benchmark interest rate six times since March, bringing it to a range between 3. 75% to 4%, the highest in 15 years. Wall Street expects that the benchmark rate will reach a peak of 5% to 5. 25% by the middle of 2023.
Inflation is easing. Economists expect the upcoming data about wholesale and consumer prices will reflect this trend. Although the pace has been slow, the Fed has made it clear that it will continue raising interest rates until inflation is under control. There are concerns that the central banking could impose too much pressure on the economy, causing a recession.
A growing number of analysts believe that the U.S. will slip into a recession in 2023,, but they are uncertain of its severity and duration.
European markets fell mainly. Overnight, Asian markets closed lower. China rolled back more of its strict COVID-19 rules that have hindered that nation’s economy and added more uncertainty to global supply chains.
Elaine Kurtenbach and Matt Ott contributed to this report.
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