S&P, Dow fall as resilient economic data fuels rate hike fears

  • Nvidia hits 10-month high with optimistic sales forecast
  • Netflix slips in report on price cuts
  • Weekly jobless claims fall; GDP grows by 2.7% in the fourth quarter
  • Indices: Dow down 0.3%, S&P dip 0.02%, Nasdaq up 0.06%

Feb 23 (Reuters) – Wall Street was mostly lower in choppy trading on Thursday, with the S&P 500 on track for a fifth consecutive daily drop and the Dow Jones Industrial Average also lower as investors remain wary of further rate hikes from recent strong economic data in the US.

On a chaotic day, the tech-heavy Nasdaq was up slightly, pulling back from an earlier session high of over 1%. Megacap stocks were mixed, with Tesla Inc (TSLA.O) up and Amazon.com Inc (AMZN.O) down.

Equity markets have been volatile this month, with the S&P 500 losing more than 4% in the past six sessions, as data pointing to a strong economy and aggressive commentary from Fed officials reduced appetite for risky assets.

The Labor Department said the number of Americans filing new claims for unemployment benefits fell unexpectedly last week, due to tight labor market conditions.

A separate report confirmed that the economy grew robustly in the fourth quarter, although rising inventory levels accounted for much of the increase.

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According to the government’s second estimate, US gross domestic product increased 2.7% in the fourth quarter. Economists had predicted an increase of 2.9%.

“Every additional bit of economic data builds up the market bears narrative that the rally so far is a false euphoria, and this weighs more on the market than the good news of some of these earnings,” said Peter Andersen, founder from Andersen Capital Management.

Analysts polled by Reuters predicted a correction within the next three months, even though they expect the S&P 500 (.SPX) to rise 5% by the end of the year.

Right now, the S&P is testing both the 50-day moving average at 3,980 points and the 200-day moving average at 3,940.

Nvidia Corp. (NVDA.O) rose 14.2% to its highest level in more than 10 months after the company forecast quarterly sales that beat estimates and reported a rise in the use of its chips to power artificial intelligence services. to conduct.

Other chipmakers also gained, including Broadcom Inc (AVGO.O) up 0.4% and Qualcomm Inc (QCOM.O) up 0.8%. The Philadelphia SE Semiconductor Index (.SOX) climbed 2.5%.

At 2:06 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 97.71 points, or 0.3%, to 32,947.38, the S&P 500 (.SPX) was down 0.92 points, or 0.02%, to 3,990.13 and the Nasdaq Composite (.IXIC) added 6.36 points or 0.06% to 11,513.43.

Eight of the 11 major S&P 500 sectors fell, with communications services (.SPLRCL) down 1.1%, hurt by a 3.8% decline in Netflix Inc (NFLX.O) after reports the streaming service cut subscription prices in 30 countries.

The communications services index was heading for its fifth straight fall, which would be the biggest since another five losses in October.

Energy (.SPNY) was one of the few winners, rising 1.3% on higher crude oil prices. If the index’s rise holds, it would halt a losing run at seven, matching its worst run since an eight-session slip in March 2017.

eBay Inc (EBAY.O), among others, fell 5.8% after warning of heavy demand in the first half of 2023 due to strained consumer spending in the United States and Europe.

Moderna Inc (MRNA.O) fell 8.4% after the vaccine maker reconfirmed its $5 billion annual sales forecast for its COVID-19 vaccines, despite Q4 sales beating estimates.

Reporting by Johann M. Cherian and Sruthi Shankar in Bengaluru and David French in New York; Adaptation by Savio D’Souza, Arun Koyyur, Anil D’Silva and David Gregorio

Our Standards: The Thomson Reuters Principles of Trust.


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