Wall Street slides as economic data fans rate hike worries

  • Q3 GDP estimate better than expected
  • Micron predicts bigger-than-expected Q2 loss
  • Other chipmakers fall behind
  • AMC is down on raising $110 million
  • Index down: Dow 0.99%, S&P 1.31%, Nasdaq 1.84%

Dec 22 (Reuters) – Wall Street’s major indexes fell on Thursday after new data showed strength in the U.S. economy and increased concerns about the Federal Reserve’s policy expansion.

Losses in megacap growth stocks such as Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O) pulled technology (.SPLRCT) and consumer discretionary shares (.SPLRCD) lower.

The final estimate for the third quarter of US GDP showed that gross domestic product rose by 3.2% year-on-year, surpassing the previous estimate of 2.9%.

Meanwhile, the Labor Department’s report showed the number of Americans filing for government benefits rose to 216,000 last week, well below economists’ 222,000, indicating that the labor market remains tight.

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“GDP data beat many expectations. There is concern that the economy is not letting up easily and is starting a battle that may require the Fed to remain hawkish and keep interest rates high for a long time,” Sam Stovall, senior. An economist at CFRA Research in New York, he said.

Wall Street indexes posted their biggest daily gain so far in December on Wednesday, helped by Nike Inc ( NKE.N ) and FedEx Corp ( FDX.N ) quarterly earnings, as well as a boost in consumer confidence and dampened expectations for a rise in inflation. prices.

Fears of a recession from the U.S. central bank’s interest rate hikes have fueled interest rates this year, with the benchmark S&P 500 (.SPX) set for a 19.7% annual decline, its worst performance since the 2008 financial crisis.

The Fed made a big splash last week at its policy meeting by saying it expects interest rates to remain high for a longer period of time, triggering a sell-off in the stock market.

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Bets for a 25-point hike to 4.5%-4.75% in February by the Fed were unchanged at around 70% following Thursday’s announcement, although expectations for a rate hike reached 4.89% by May 2023.

At 9:50 am ET, the Dow Jones Industrial Average (.DJI) was down 331.19 points, or 0.99%, at 33,045.29, the S&P 500 (.SPX) was down 50.70 points, or 1.31%, at 3,827.74, and the Nasdaq The Composite (.IXIC) was down 197.23 points, or 1.84%, at 10,512.14.

Micron Technology Inc ( MU.O ) fell 3.2% after the chipmaker reported a bigger-than-expected loss for the second quarter, leading to a decline in peers.

Nvidia Corp (NVDA.O), Qualcomm Inc (QCOM.O), Advanced Micro Devices Inc (AMD.O) and Intel Corp (INTC.O) were down between 3.0% and 5.1%, pushing the Philadelphia SE Semiconductor index (. SOX) more than 3% lower.

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CarMax Inc (KMX.N) fell 8.6% to the bottom of the S&P 500 after the used-car retailer paused share buybacks following an 86% drop in quarterly profit.

AMC Entertainment Holdings Inc (AMC.N) fell 12.5% ​​after the world’s largest movie group said it would raise $110 million by selling preferred stock.

Bearish news outnumbered the forwards by a ratio of 5.83-to-1 on the NYSE and a ratio of 3.28-to-1 on the Nasdaq.

The S&P index posted no new 52-week highs and nine new lows, while the Nasdaq posted 27 new highs and 180 new lows.

Shubham Batra, Amruta Khandekar, Ankika Biswas and Johann M Cherian report in Bengaluru; Edited by Shounak Dasgupta

Our Standards: Thomson Reuters Trust Principles.

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