Wall Street ends down for third day as growth concerns weigh on tech

Sept 22 (Reuters) – Main Wall Avenue indexes ended decrease on Thursday, falling for a 3rd straight session as buyers reacted to the Federal Reserve’s newest aggressive transfer to rein in inflation by promoting progress shares, together with know-how corporations.

The Fed lifted charges by an anticipated 75 foundation factors on Wednesday and signaled an extended trajectory for coverage charges than markets had priced in, fuelling fears of additional volatility in inventory and bond buying and selling in a yr that has already seen bear markets in each asset lessons. learn extra

The U.S. central financial institution’s projections for financial progress launched on Wednesday have been additionally eye-catching, with progress of simply 0.2% this yr, rising to 1.2% for 2023.

Jitters have been already current out there after quite a lot of corporations – most just lately FedEx Corp and Ford Motor Co (F.N) – issued dire outlooks for earnings.

As of Friday, the S&P 500’s estimated earnings progress for the third quarter is at 5%, in keeping with Refinitiv knowledge. Excluding the vitality sector, the expansion charge is at -1.7%.

The S&P 500’s ahead price-to-earnings ratio, a typical metric for valuing shares, is at 16.8 occasions earnings – far under the practically 22 occasions ahead P/E that shares commanded at the beginning of the yr.

9 of the 11 main S&P sectors fell, led by declines of two.2% and 1.7%, respectively, in client discretionary (.SPLRCD) and monetary (.SPSY) shares.

Shares of megacap know-how and progress corporations reminiscent of Amazon.com Inc (AMZN.O), Tesla Inc (TSLA.O) and Nvidia Corp (NVDA.O) fell between 1% and 5.3% as benchmark U.S. Treasury yields hit an 11-year excessive.

Rising yields weigh significantly on valuations of corporations within the know-how sector, which have excessive anticipated future earnings and type a big a part of the market-cap weighted indexes such because the S&P 500.

The S&P 500 tech sector (.SPLRCT) has slumped 28% thus far this yr, in contrast with a 21.2% decline within the benchmark index.

“If we proceed to have sticky inflation, and if (Fed Chair Jerome) Powell sticks to his weapons as he signifies, I feel we enter recession and we see vital drawdown on earnings expectations,” mentioned Mike Mullaney, director of worldwide markets at Boston Companions.

“If this occurs, I’ve excessive conviction underneath these situations that we break 3,636,” he added, referring to the S&P 500’s mid-June low, its weakest level of the yr.

The Dow Jones Industrial Common (.DJI) fell 107.1 factors, or 0.35%, to 30,076.68, the S&P 500 (.SPX) misplaced 31.94 factors, or 0.84%, to three,757.99 and the Nasdaq Composite (.IXIC) dropped 153.39 factors, or 1.37%, to 11,066.81.

Main U.S. airways – which have loved a rebound amid elevated journey as pandemic restrictions finish – have been additionally down, with United Airways (UAL.O) and American Airways (AAL.O) falling 4.6% and three.9% respectively. This took losses within the final three days to 11% for United and 10.6% for American.

JetBlue Airways Corp (JBLU.O), off 7.1% and in addition recording a 3rd straight loss, closed at its lowest stage since March 2020.

Darden Eating places Inc (DRI.N) slid 4.4% after the Olive Backyard guardian reported downbeat first-quarter gross sales.

Quantity on U.S. exchanges was 11.39 billion shares, in contrast with the ten.91 billion common for the complete session over the past 20 buying and selling days.

The S&P 500 posted one new 52-week excessive and 123 new lows; the Nasdaq Composite recorded 18 new highs and 699 new lows.

Reporting by Sruthi Shankar, Medha Singh, Devik Jain and Ankika Biswas in Bengaluru and David French in New York; Modifying by Shounak Dasgupta, Anil D’Silva and Deepa Babington

: .