Dow Falls More Than 600 Points on Worries Over Fed, Economy - WSJ
Category: News & Politics
Via: vic-eldred • 2 years ago • 12 commentsBy: Caitlin Ostroff and Alexander Osipovich (WSJ)
S E E D E D C O N T E N T
U.S. stocks fell as traders worried about further interest-rate increases and the backdrop of a slowing economy.
The Dow Jones Industrial Average slid 1.9%, or more than 640 points, in Monday's trading. The S&P 500 dropped 2.1%, while the technology-focused Nasdaq Composite tumbled more than 2.5%.
The declines came after U.S. stocks ended last week lower, snapping a four-week stretch of gains for the S&P 500. Stocks rose from July to mid-August on hopes that inflation has started to peak , which would allow the Federal Reserve to ease up on lifting rates, as well as on generally strong corporate earnings. But Fed officials remained publicly hawkish, casting doubt on the strength of the midsummer rally.
“The market got a little ahead of itself,” said Philip Blancato, chief executive of Ladenburg Thalmann Asset Management. “The market wants the Fed to sound off on the dovish standpoint, but the Fed’s not there yet.”
Investors are awaiting comments Friday from Fed Chairman Jerome Powell, in Jackson Hole, Wyo., on the central bank’s economic outlook. Futures markets show traders are split as to whether the central bank will raise interest rates by half a percentage point or three-quarters of a point at its September meeting. Aggressive increases could cause businesses and consumers to cut back on spending, potentially hurting corporate earnings and economic growth.
“Jackson Hole is something the market is starting to get nervous about,” said Hani Redha, a portfolio manager at PineBridge Investments. After the last central-bank meeting, some investors expected that the Fed would be less aggressive on interest-rate increases as economic data worsened, he said, adding that “there is chatter that perhaps Powell will try to reverse that perception.”
The yield on the benchmark 10-year Treasury note rose to 3.035%, from 2.987% Friday. Yields and prices move inversely.
Netflix , a big beneficiary of the market’s midsummer rally, slid 6% after analysts at CFRA Research recommended that investors sell the stock.
Shares of Ford Motor fell 5% after a $1.7 billion jury verdict from Friday that calls into question the roof strength of some trucks. The automaker has said it plans to appeal.
Bed Bath & Beyond , an individual-investor favorite whose shares have been on a wild ride in recent days, tumbled nearly 16% after S&P downgraded the retailer’s credit rating.
Palo Alto Networks and Zoom Video Communications were slated to post quarterly results after markets close.
In currencies, the WSJ Dollar Index , which measures the greenback against a basket of 16 currencies, edged higher. The euro weakened, again touching parity with the dollar .
Bitcoin , the world’s largest cryptocurrency by market value, slipped 1.1% from its 5 p.m. ET level Sunday to trade at about $21,277. The digital currency briefly broke below $21,000 earlier Monday. Crypto prices are heavily influenced by sentiment, causing selling in times of broad market selloffs.
Major stock indexes in Europe weakened, with the pan-continental Stoxx Europe 600 closing 1% lower, led by losses in German, Italian and French stocks.
Natural-gas prices shot higher in Europe, spurred by worries that a planned closure of the Nord Stream pipeline by Russia will prevent the continent from amassing sufficient fuel supplies before winter. Benchmark European gas prices jumped 13% to settle at 276.75 euros a megawatt-hour.
Stocks in Asia closed mostly lower, with the exception of China’s Shanghai Composite. The index gained 0.6% after banks in China cut benchmark interest rates on loans to households and businesses.
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Blame Joe Biden and the congressional democrats and the Fed. Now the Fed will have to act dramatically and most of Wall Street knows it.
Donald Trump is absolutely off topic..
Hahaha!!! Will you praise Joe Biden and the congressional democrats when the market corrects?
How do you figure?
A "correction' would not involve government policy.
"A correction is a 10 percent drop in stocks from their most recent high. It is pretty straightforward; it is considered a correction if a stock market drops 10%."
How do you figure?
They've had the prime rate close to zero for how long? They may have created another housing bubble.
The Fed has been acting dramatically and will continue to do so until inflation returns to somewhere near their 2% target, down from the steady 8-9% we have currently. That's not new, BTW.
Lol .... meanwhile Biden tries to praise his policies for gas prices dropping from all time highs under his watch.
Gas prices which are still over 70% higher than when he was elected.
Most Americans aren’t stupid enough to buy that horseshit. That will become apparent this November.
I wonder what happens to those already high prices when we start replenishing the strategic reserve?
And/or when demand goes back up.
Will you blame Brandon and the Democrats if the market continues to go down?
Where have you been the past year and half? That is all the Fed is talking about is how many times they will have to raise interest rates; and how fast. 8-9 percent inflation isn't going anywhere no matter how Brandon boasts about July being a 0% increase in inflation. Numbers can be crunched to show anything; fact prices still went up on some things- and down on others. Net gain came to zero with the way the Biden administration calculated it. That is nothing to hang their damn hats on.
Meaning what exactly? That stocks were artificially high and the most recent sell off was it correcting closer to where it should be given the conditions? That the market over reacted to what the Fed may do; and if it is not as bad as predicted will correct back up? That the market underestimated what the Fed will do; and when it comes out it will correct further down? Taken in the context of the article go with option 1; and be prepared for option 3.
Relax, after 2+ solid weeks of horrendous news the right needs their 5 minutes of dead horse kicking.
Meanwhile many liberals continue their years long trip down the river denial. Led by shotgun Joe and the bidenettes
A funny pun in the 1930s. Today's over usage has become the daffynition of a fool with wit ... in a word, tiresome.
Still funny as hell and in this context, never more true.
Not unexpected that folks with this malady would get tired of hearing it.
Not unexpected at all ...