Wall Street Closes Lower as Investors Assess Fed Policy Path

Wall Street Closes Lower as Investors Assess Fed Policy Path
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  • Losses accelerate to choppy session close
  • Fed mastermind signals slower rate hikes ahead
  • Real estate and discretionary, the biggest declines in the S&P
  • Biogen and Lilly rise up over the failure of Roche’s Alzheimer’s drugs
  • Indices down: Dow 0.63%, S&P 500 0.89%, Nasdaq 1.12%

Nov 14 (Reuters) – Wall Street’s main indexes closed lower on Monday, with the real estate and discretionary sectors leading broad declines, as investors digested comments from U.S. Federal Reserve officials.

Losses accelerated towards the end of the up-and-down session, focusing on Tuesday’s Producer Price Index report and markets highly sensitive to inflation data.

Earlier on Monday, Fed Vice Chair Lael Brainard indicated that the central bank would probably reduce its interest rate hikes soon. His comments buoyed sentiment for stocks a bit, which had weakened after the Fed governor. Christopher Waller on Sunday He said the Fed might consider slowing the rate hikes at its next meeting, but that should not be seen as “softening” its commitment to reduce inflation.

A massive rally in stocks late last week was sparked by a softer-than-expected inflation report that boosted investors’ hopes that the Fed could reverse its monetary tightening that has punished markets this year.

“There’s still a sensitivity to the Fed’s speech… One was a little bit aggressive, the other was a little bit dovish,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.

The Dow Jones Industrial Average (.DJI) fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 (.SPX) lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite (.IXIC) it fell 127.11 points, or 1.12%, to 11,196.22.

The S&P 500 last week posted its biggest weekly percentage gain since late June, while the Nasdaq (.IXIC) It posted its best week since March.

Raindrops hang from a Wall Street sign outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar/Photo By File, Archive

More Fed officials are due to speak later this week along with a slew of data, including retail and housing sales, and earnings reports from major retailers.

“It just makes sense that the market wants to pause and really both try to make sense of the trajectory (of Fed policy) and what the next drivers are going to be,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. .

Among S&P 500 sectors, real estate (.SPLRCR) fell 2.7%, discretionary consumption (.SPLRCD) fell 1.7% and financials (.SPSY) decreased 1.5%.

In company news, Amazon (AMZN.O) shares fell 2.3% when The New York Times reported Monday that the company planned let about 10,000 people in corporate and tech jobs as of this week.

Shares of Biogen Inc. (BIIB.O) and Eli Lilly (LLY.N) gained 3.3% and 1.3%, respectively, after the failure from Swiss rival Roche (ROG.S) Drug candidate for Alzheimer’s disease.

Down issues outnumbered up ones on the New York Stock Exchange by a ratio of 2.23 to 1; on the Nasdaq, a ratio of 1.61 to 1 favored decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; The Nasdaq Composite posted 72 new highs and 74 new lows.

About 11.5 billion shares changed hands on US stocks, compared with a daily average of 12.1 billion over the past 20 sessions.

Reporting from Lewis Krauskopf in New York, Shubham Batra, Bansari Mayur Kamdar, Ankika Biswas, and Amruta Khandekar in Bangalore; Edited by Shounak Dasgupta, Vinay Dwivedi, and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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