By — Damian J. Troise, Associated Press Damian J. Troise, Associated Press By — Alex Veiga, Associated Press Alex Veiga, Associated Press Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/u-s-stocks-slide-as-investors-weigh-economic-data-continued-inflation-fight Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter U.S. stocks slide as investors weigh economic data, continued inflation fight Economy Dec 5, 2022 4:27 PM EDT Stocks are broadly lower on Wall Street in afternoon trading Monday as investors weigh a surprisingly good economic report that highlights the Federal Reserve’s difficult fight against inflation. The S&P 500 fell 2.1 percent as of 2:46 p.m. Eastern, and was on pace for a third straight drop. The slide has more than offset the index’s gains last week. The Dow Jones Industrial Average fell 563 points, or 1.6 percent, to 33,866 and the Nasdaq composite fell 2.3 percent. READ MORE: After rocky morning, stocks mount biggest comeback in years Bond yields mostly headed higher. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.60 percent from 3.49 percent late Friday. The services sector, which makes up the biggest part of the U.S. economy, showed surprising growth in November, according to the Institute for Supply Management. The report is positive for the broader economy, but it makes the Fed’s fight against inflation more difficult and means the central bank will likely have to remain aggressive in order to keep pressuring inflation. Meanwhile, China is lifting some of its most severe COVID-19 restrictions following protests across major cities. That has raised hopes that disruptions to manufacturing and trade will ease. Investors are also weighing several international developments that could further unsettle a global economy that is already getting burned by stubbornly hot inflation. Russia’s ongoing invasion of Ukraine continues agitating an already volatile global energy market. U.S. crude oil prices bounced around before settling 3.8 percent lower after a group of world leaders agreed to a boycott of most Russian oil. They also committed to a price cap of $60 per barrel on Russian exports. READ MORE: U.S. job openings fell in August, potentially calming inflation Oil and gas company stocks fell along with a broad pullback in energy prices, including an 11.2 percent slump in natural gas. Exxon Mobil fell 3.5 percent. All told, more than 95 percent of the stocks in the benchmark S&P 500 index were in the red, with technology companies, banks and retailers among the biggest weights on the market. Chipmaker Nvidia fell 2 percent, Bank of America slid 4.9 percent and Amazon dropped 3.3 percent. Markets in Asia rose, while markets in Europe closed mostly lower. Inflation, rising interest rates and the potential for recessions throughout global economies are among the biggest concerns for investors. Wall Street has been closely watching corporate announcements and government reports to get a better sense of just how much damage is being done to the economy and inflation’s path ahead in 2023. V.F. Corp., which makes Vans shoes and The North Face outdoor gear, slid 10.9 percent after warning investors that weak demand is crimping revenue. The company also announced the departure of its CEO. Tesla fell 6.9 percent following reports that it may have to cut production in China because of weak demand. READ MORE: U.S. stocks continue to fall as inflation remains Investors are dealing with several crosscurrents of information. Demand may be weakening in some areas of the economy, but some sectors remain resilient. Employment remains a strong area of the economy as does overall consumer spending. Wall Street will get a weekly update on unemployment claims on Thursday. Investors will likely be more focused on the monthly report on producer prices, for November, from the government on Friday. The Fed has been aggressively raising its benchmark interest rate in an effort to tame inflation. The strategy is intended to make borrowing more expensive and generally hit the brakes on consumer spending and the economy. The risk is that the policy could send the economy into a recession. The Fed is in a very “hawkish, but awkward” position, said Gene Goldman, chief investment officer at Cetera Investment Management. “All of this is playing into uncertainty,” he said. The Fed is meeting next week and is expected to raise interest rates by a half-percentage point, which would mark an easing of sorts from a steady stream of three-quarters of a percentage point rate increases. It has raised its benchmark rate six times since March, driving it to a range of 3.75 percent to 4 percent, the highest in 15 years. Wall Street expects the benchmark rate to reach a peak range of 5 percent to 5.25 percent by the middle of 2023. Elaine Kurtenbach and Matt Ott contributed to this report. By — Damian J. Troise, Associated Press Damian J. Troise, Associated Press By — Alex Veiga, Associated Press Alex Veiga, Associated Press
Stocks are broadly lower on Wall Street in afternoon trading Monday as investors weigh a surprisingly good economic report that highlights the Federal Reserve’s difficult fight against inflation. The S&P 500 fell 2.1 percent as of 2:46 p.m. Eastern, and was on pace for a third straight drop. The slide has more than offset the index’s gains last week. The Dow Jones Industrial Average fell 563 points, or 1.6 percent, to 33,866 and the Nasdaq composite fell 2.3 percent. READ MORE: After rocky morning, stocks mount biggest comeback in years Bond yields mostly headed higher. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.60 percent from 3.49 percent late Friday. The services sector, which makes up the biggest part of the U.S. economy, showed surprising growth in November, according to the Institute for Supply Management. The report is positive for the broader economy, but it makes the Fed’s fight against inflation more difficult and means the central bank will likely have to remain aggressive in order to keep pressuring inflation. Meanwhile, China is lifting some of its most severe COVID-19 restrictions following protests across major cities. That has raised hopes that disruptions to manufacturing and trade will ease. Investors are also weighing several international developments that could further unsettle a global economy that is already getting burned by stubbornly hot inflation. Russia’s ongoing invasion of Ukraine continues agitating an already volatile global energy market. U.S. crude oil prices bounced around before settling 3.8 percent lower after a group of world leaders agreed to a boycott of most Russian oil. They also committed to a price cap of $60 per barrel on Russian exports. READ MORE: U.S. job openings fell in August, potentially calming inflation Oil and gas company stocks fell along with a broad pullback in energy prices, including an 11.2 percent slump in natural gas. Exxon Mobil fell 3.5 percent. All told, more than 95 percent of the stocks in the benchmark S&P 500 index were in the red, with technology companies, banks and retailers among the biggest weights on the market. Chipmaker Nvidia fell 2 percent, Bank of America slid 4.9 percent and Amazon dropped 3.3 percent. Markets in Asia rose, while markets in Europe closed mostly lower. Inflation, rising interest rates and the potential for recessions throughout global economies are among the biggest concerns for investors. Wall Street has been closely watching corporate announcements and government reports to get a better sense of just how much damage is being done to the economy and inflation’s path ahead in 2023. V.F. Corp., which makes Vans shoes and The North Face outdoor gear, slid 10.9 percent after warning investors that weak demand is crimping revenue. The company also announced the departure of its CEO. Tesla fell 6.9 percent following reports that it may have to cut production in China because of weak demand. READ MORE: U.S. stocks continue to fall as inflation remains Investors are dealing with several crosscurrents of information. Demand may be weakening in some areas of the economy, but some sectors remain resilient. Employment remains a strong area of the economy as does overall consumer spending. Wall Street will get a weekly update on unemployment claims on Thursday. Investors will likely be more focused on the monthly report on producer prices, for November, from the government on Friday. The Fed has been aggressively raising its benchmark interest rate in an effort to tame inflation. The strategy is intended to make borrowing more expensive and generally hit the brakes on consumer spending and the economy. The risk is that the policy could send the economy into a recession. The Fed is in a very “hawkish, but awkward” position, said Gene Goldman, chief investment officer at Cetera Investment Management. “All of this is playing into uncertainty,” he said. The Fed is meeting next week and is expected to raise interest rates by a half-percentage point, which would mark an easing of sorts from a steady stream of three-quarters of a percentage point rate increases. It has raised its benchmark rate six times since March, driving it to a range of 3.75 percent to 4 percent, the highest in 15 years. Wall Street expects the benchmark rate to reach a peak range of 5 percent to 5.25 percent by the middle of 2023. Elaine Kurtenbach and Matt Ott contributed to this report.