Wall Street falls as comments from hardline Fed officials weigh

Wall Street falls as comments from hardline Fed officials weigh
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  • Fed’s Bullard Backs More Rate Hikes
  • Data Shows US Job Market Remains Tight
  • Cisco shares rise after company raises full-year outlook
  • Macy’s jumps on rising profit forecast
  • Indices Down: Dow 0.02%, S&P 0.31%, Nasdaq 0.35%

Nov 17 (Reuters) – Wall Street’s main indexes closed modestly lower on Thursday in a choppy session, as aggressive comments from a U.S. Federal Reserve official and data showing the job market remained tight led some investors to worry about more aggressive interest rate hikes.

S t. James Bullard, President of the Louis Fed said the central bank needs to keep raising rates as its tightening so far “had only limited effects on actual inflation.”

Stocks have fallen in recent days after a strong month-long rally fueled by softer-than-expected inflation reports that raised hopes the Fed would ease its rate hikes.

“The Fed continues to talk, in general, about interest rates,” said Paul Nolte, a portfolio manager at Kingsview Investment Management in Chicago. “There may be some disagreement on the pace. But interest rates are not going to go down anytime soon.”

Stocks pared losses late in the session, but the major indices still ended in negative territory.

The Dow Jones Industrial Average (.DJI) fell 7.51 points, or 0.02%, to 33,546.32, the S&P 500 (.SPX) lost 12.23 points, or 0.31%, to 3,946.56 and the Nasdaq Composite (.IXIC) it fell 38.70 points, or 0.35%, to 11,144.96.

Data showed that the number of Americans filing new claims for unemployment benefits fell last week, suggesting that the labor market remained tight. A report on Wednesday detailed strong growth in retail sales last month, indicating that the economy has resisted rate hikes.

Trader bets on a 75 basis point hike at the next Fed meeting rose to 19% from around 15% the day before, according to CME Group’s FedWatch tool. Most investors are still expecting a 50 basis point increase.

cisco systems (CSCO.O) shares rose 5% after the company raised its full-year revenue and profit forecast with less supply chain hurdles. The stock helped the information technology sector of the S&P 500 (.SPLRCT) record a gain of 0.2%.

However, most sectors of the S&P 500 ended lower, with utilities (.SPLRCU) throwing 1.8% and discretionary consumption (.SPLRCD) falling around 1.3%.

In company news, Macy’s stock (MINNESOTA) increased 15% after the department store chain raised its annual earnings forecast on resilient demand for high-end clothing and beauty products.

Issues going down outnumbered going up on the New York Stock Exchange by a ratio of 2.06 to 1; on Nasdaq, a 1.65-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week high and 1 new low; The Nasdaq Composite posted 46 new highs and 169 new lows.

About 10.3 billion shares changed hands on US exchanges, compared with a daily average of 12.1 billion over the past 20 sessions.

Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Edited by Vinay Dwivedi, Arun Koyyur and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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