March 1, 2024

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Wall Street closed lower as Fed fears outweighed profits

Wall Street closed lower as Fed fears outweighed profits
  • IBM is up as it sees full-year sales soar
  • Tesla expects to miss its car delivery target this year
  • AT&T raises annual profit forecast
  • Dow Jones down 0.3%, Standard & Poor’s 500 down 0.80%, Nasdaq down 0.61%

NEW YORK (Reuters) – U.S. stocks ended lower on Thursday as labor market data and comments from a U.S. Federal Reserve official boosted expectations that the central bank would be aggressive in raising interest rates, outpacing a wave of solid corporate earnings.

Stocks initially rose early in the session, buoyed by gains in names such as IBM (IBM.N), up 4.73% after the IT services company beat quarterly earnings estimates on Wednesday and said it expects to exceed full-year revenue growth targets. AT&T Inc (Tennessee) It rose 7.72% after raising its annual earnings forecast.

But stocks were unable to sustain gains as strong weekly jobless claims and comments from Philadelphia Federal Reserve Bank President Patrick Harker bolstered concerns about the Fed’s rate hike and the possibility of pushing the economy into recession.

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Harker said the Fed has not finished raising its short-term interest rate target as inflation continues to rise, helping push the 10-year US Treasury yield to its highest level since June 2008 at 4.239%.

“Interest rates are driving stock volatility, and that’s how we look at things all year long, and that’s kind of a start to seeing things cool off in the equity space and feeling better about adding risk, there’s lower volatility in the stock market,” said Zachary Hill, head of portfolio management at Horizon Investments. In Charlotte, North Carolina, “interest rates”.

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“I’m not sure we’ll be able to see that pause that a few Fed members have signaled and certainly a few market participants have been kind of sticking with it.”

Dow Jones Industrial Average (.DJI) It fell 90.22 points, or 0.3%, to 30,333.59, the Standard & Poor’s 500 . (.SPX) It lost 29.38 points, or 0.80%, to 3665.78 points, and the Nasdaq Composite (nineteenth) It fell 65.66 points, or 0.61%, to 10,614.84 points.

Better-than-expected results so far pushed third-quarter earnings growth expectations for the S&P 500 companies to 3.1% from a 2.8% increase earlier in the week, but still well below the 11.1% increase forecast at the beginning of July.

Tesla Corporation (TSLA.O) It fell 6.65% as the electric car maker cited continued logistical challenges, with fourth-quarter deliveries growing well below the 50% target.

Stocks have been under pressure this year over concerns about the impact of the Federal Reserve’s aggressive path to raising interest rates on corporate earnings and the general economy, as the central bank tries to cool stubbornly high inflation.

Other data showed that existing home sales fell for eight consecutive months, while another reading showed that factory activity at the Philadelphia-area Fed contracted again in October.

The US central bank is widely expected to announce a fourth consecutive hike of 75 basis points at its November meeting, with an outside chance of a full percentage point increase.

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Volume on US exchanges was 11.37 billion shares compared to an average of 11.62 billion for the full session over the last 20 trading days.

Low issues outnumbered advanced issues on the New York Stock Exchange by 2.12 to 1; On the Nasdaq, the ratio was 1.34 to 1 in favor of declining stocks.

The S&P 500 posted 3 new highs in 52 weeks and 28 new lows; Nasdaq Composite recorded 53 new highs and 239 new lows.

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(Reporting by Chuck Mikolajchak) Editing by Aurora Ellis

Our criteria: Thomson Reuters Trust Principles.