Wall St down for fourth straight day on Fed rate hike concern

  • The first weekly jobless claims in the United States fall
  • Service sector growth is slowing
  • Qualcomm and Roku slump on weak forecast
  • Dow down 0.46%, S&P 500 down 1.06%, Nasdaq down 1.73%

NEW YORK, Nov 3 (Reuters) – U.S. stocks closed lower for a fourth consecutive session on Thursday as economic data did little to shake expectations that the Federal Reserve would continue to raise interest rates for longer than expected .

Following the Federal Reserve’s statement on Wednesday, comments from Fed Chairman Jerome Powell that it was “very premature” to consider pausing its rate hikes dragged stocks lower as U.S. bond yields and the US dollar rose, a trend that extended through Thursday.

Thursday’s economic data showed a labor market that remains strong, although a separate report showed growth in the services sector slowed in October, keeping the Fed on its aggressive course of raising interest rates.

Unemployment Insurance Claims and Challenger Gray

“Years ago the job of the Fed was to pull the punch bowl out and that balance is always a very difficult transition. You want the economy to slow down to keep inflation from getting out of control, but you want enough earnings to support stock prices,” Rick said. Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

“It’s as much about the rate of change as it is about the change, so when the rate of change starts to slow…it becomes almost positive even though in absolute terms we’re going to continue to see higher rates, and higher rates mean more competition for shares and lower multiples.”

The Dow Jones Industrial Average (.DJI) fell 146.51 points, or 0.46%, to 32,001.25, the S&P 500 (.SPX) lost 39.8 points, or 1.06%, to 3,719.89 and the Nasdaq Composite (.IXIC) fell 181.86 points, or 1.73%, to 10,342.94.

While traders are roughly evenly split between the odds of a 50 basis point and 75 basis point rate hike in December, the top federal funds rate is expected to climb to at least 5%, from an earlier view of a rise to 4.50. Range %-4.75%.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 14, 2022. REUTERS/Brendan McDermid

Investors will be keeping a close eye on Friday’s nonfarm payrolls report as Fed rate hikes begin to have a noticeable impact on the slowing economy.

Rising yields weighed on mega-cap growth companies like Apple Inc (AAPL.O), down 4.24%, and Alphabet Inc (GOOGL.O), which lost 4.07% and tumbled technology (.SPLRCT) and communication services (.SPLRCL) as the worst performing areas of the session.

Losses were curbed on the Dow Jones thanks to gains from industrialists including Boeing Co (BA.N), which rose 6.34%, and a 2.20% rise in heavy equipment maker Caterpillar Inc. (CAT.N).

Qualcomm Inc (QCOM.O) and Roku Inc (ROKU.O) fell 7.66% and 4.57%, respectively, after their forecasts for the holiday quarter fell short of expectations. Read more

With about 80% of S&P 500 companies reporting profits, the expected growth rate is 4.7%, according to Refinitiv data, up slightly from 4.5% in early October.

Volume on U.S. exchanges was 11.81 billion shares, compared to an average of 11.63 billion for the full session over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 1.75 to 1; on the Nasdaq, a 1.50-to-1 ratio favored decliners.

The S&P 500 posted 6 new 52-week highs and 46 new lows; the Nasdaq Composite recorded 77 new highs and 291 new lows.

Reporting by Chuck Mikolajczak in New York Editing by Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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