Wall Street falls, dragged by retail and tech stocks

U.S.A.Wall Street falls, dragged by retail and tech stocks

File image of a Wall Street sign in New York, USA. February 16, 2021. Reuters / Brendan McDermid

By Amber Warik and Devik Jain

Nov 24 (Reuters) – Wall Street indexes fell on Wednesday as data pointed to the strength of the US economy, highlighting inflationary pressures, while disappointing earnings from retailers also hurt investor sentiment.

* Shares of department store operator Nordstrom Inc. and clothing retailer Gap Inc. fell 29.3% and 23.2%, respectively, after both companies warned of supply chain problems and increased costs during the crucial holiday season.

* The broader retail index was down 0.4% as results set a gloomy tone for the industry ahead of the Thanksgiving weekend, which kicks off the US holiday season.

“The problem is, expectations are high for a very strong and solid holiday shopping season for retailers. Anything less will be disappointing,” said Ken Mahoney, CEO of Mahoney Asset Management.

* Tech stocks were the biggest hurdle for the S&P 500 and Nasdaq, adding to losses this week after the nomination of Jerome Powell as Federal Reserve chairman bets to sharply tighten United States monetary policy.

* Tech stocks are sensitive to rising interest rates, as their value is highly dependent on future earnings, which fall further as rates rise.

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* The S&P technology sector and the communications services sector each fell 0.4%.

* Data showed US consumer spending rose more than expected in October, as households bought motor vehicles and many other items, although price pressure intensified.

* The so-called core PCE price index, the Fed’s preferred measure of inflation, rose 4.1% in 12 months to October after a 3.7% advance in September.

* Other data showed weekly claims for unemployment benefits declined and third quarter GDP was revised upwards.

* The focus is also on the minutes of the Fed’s meeting on November 2-3, scheduled for later in the day, the pace at which the central bank intends to ease the COVID-era stimulus measures. Is. Fed officials agreed at the meeting to reduce monthly asset purchases.

* The Dow Jones Industrial Average was down 105.30 points, or 0.29%, at 35,708.50 in close afternoon trading, and the S&P 500 was down 11.77 points, or 0.25%, at 4,678., 93 units. The Nasdaq Composite was down 49.83 points, or 0.32%, at 15,725.31.

(Reporting by Devik Jain in Bengaluru; Editing in Spanish by Rodrigo Charme)

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