Nasdaq leads Wall Street lower after hawkish Fed comments

  • Technology and growth stocks decline as productivity rises
  • Biogen, Lilly rise from failure of Roche’s Alzheimer’s drug
  • Index down: Dow 0.02%, S&P 0.43%, Nasdaq 1.02%

Nov 14 (Reuters) – Wall Street’s major indexes fell on Monday, with the weighty Nasdaq down nearly 1%, as hawkish comments from the head of the U.S. Federal Reserve tempered expectations that the central bank is easing its monetary policy.

Federal Reserve Governor Christopher Waller, a voting member of this year’s rate-setting committee, said on Sunday that markets should pay attention to the “end” of the rate hike, not the speed of any movement, and that the end could be “way to go”.

The comments follow a weaker-than-expected report last week, which boosted hopes that the Fed could cut interest rates significantly and help drive the stock market’s recovery.

The S&P 500 in the previous session posted its biggest weekly gain in nearly five months, while the tech-heavy Nasdaq (.IXIC) posted its best week since March.

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In the coming week, it will focus on economic data including Wednesday’s retail sales numbers and the speeches of several Fed officials for information on interest rates.

“The market expects the Fed to continue to be hawkish on rates. This could change once we get more confirmation on inflation in December,” said Peter Cardillo, market economist at Spartan Capital Securities.

Traders now expect the Fed to increase interest rates in December by half a point, and expect the final figure to be 4.75%-5.0% next year.

At 9:42 a.m. ET, the S&P 500 (.SPX) was down 17.25 points, or 0.43%, at 3,975.68, and the Nasdaq Composite (.IXIC) was down 115.13 points, or 1.02%, at 11,208.20.

The Dow Jones Industrial Average (.DJI) was down 7.84 points, or 0.02%, at 33,740.02. Earnings from drugmakers including Johnson & Johnson ( JNJ.N ) and Amgen ( AMGN.O ) are a few of the blue-chip indexes down.

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As U.S. Treasuries increased, technology and growth names such as Microsoft Corp ( MSFT.O ), Apple Inc ( AAPL.O ) and Inc ( AMZN.O ) fell between 1% and 3%.

The S&P 500 technology sector (.SPLRCT) was down 1.2% and among the top performers in the index sector.

Tesla Inc (TSLA.O) fell 3.4% as Chief Executive Elon Musk said “I have a lot of work on my plate” when asked about his recent acquisition of Twitter and his leadership of the electric car maker.

Chinese President Xi Jinping and US President Joe Biden met on Monday for long-awaited talks that come as relations between their countries are at their lowest point in decades, marred by disagreements over a number of trade deals from Taiwan.

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Among other stocks, Biogen Inc ( BIIB.O ) and Eli Lilly ( LLY.N ) gained 3.4% and 1.4%, respectively, after failing to compete with Swiss rival Roche’s ( ROG.S ) Alzheimer’s drug candidate.

Actors AMC Entertainment jumped 6.5% as the latest Marvel film “Black Panther: Wakanda Forever” earned $330 million worldwide in its opening weekend, while Hasbro Inc ( HAS.O ) fell 7.4% after BofA Global Research downgraded player stocks.

Bearish news outnumbered the forwards by a ratio of 2.08-to-1 on the NYSE and a ratio of 1.65-to-1 on the Nasdaq.

The S & P index recorded four new 52-week highs and no lows, while the Nasdaq recorded 23 new highs and 21 new highs.

Shubham Batra, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar report in Bengaluru; Edited by Shounak Dasgupta

Our Standards: Thomson Reuters Trust Principles.


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