NEW YORK (AP) – Stocks fell broadly in morning trading on Wall Street yesterday as worries about rising inflation and interest rate hikes weigh on investors and extend the market’s losses.
The S&P 500 fell 1.2 per cent as of 10.19am Eastern time and more than 90 per cent of stocks within the index lost ground. The decline follows a weak finish last week that sank the benchmark index for a third straight week.
The Dow Jones Industrial Average fell 371 points, or 1.1 per cent, to 33,440 and the Nasdaq fell 0.6 per cent.
US stocks are following global markets lower, especially in China, over worries that strict lockdown measures there might crimp the world’s second-largest economy and potentially hurt global economic growth. Hong Kong’s Hang Seng slumped 3.7 per cent.
The Shanghai Composite fell 5.1 per cent.
China’s capital, Beijing, began mass testing of more than three million people yesterday and restricted residents in one part of the city to their compounds, sparking worries of a wider lockdown similar to Shanghai. That city has been locked down for more than two weeks and that has already prompted the International Monetary Fund (IMF) to trim its growth forecast for China’s economy.
Prices for ultra-safe US government bonds rose as traders shied away from risk. The yield on the 10-year Treasury, which affects rates on mortgages and other consumer loans, fell significantly to 2.78 per cent from 2.90 per cent late on Friday.
Energy companies were among the biggest losers as US crude oil prices slipped 5.6 per cent. Exxon Mobil fell 5.2 per cent.
Banks and technology stocks also fell sharply. Bank of America fell 3.2 per cent and Apple shed 1.6 per cent.
Twitter rose 3.4 per cent and was one of the few bright spots in the market. The social media company and Tesla CEO Elon Musk are reportedly negotiating a buyout offer.
Rising inflation remains a key concern for investors. Investors continue to focus on the measures being taken by central banks to temper the impact on businesses and consumers.
The chair of the Federal Reserve has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. The Fed has already raised its key overnight rate once, the first such increase since 2018.
Investors have a heavy week of corporate earnings ahead. Reactions to the latest round of corporate report cards have been mixed and several disappointing profit reports last week shook what’s been the market’s main pillar of support.
Beverage giant Coca-Cola was mostly unchanged yesterday after reporting strong financial results. Google, parent, Alphabet, and General Motors will report their results today, along with Microsoft and Visa. Boeing, Ford and Facebook parent, Meta, are on deck to report results tomorrow. Thursday is an especially busy day and will include reports from industrial giant Caterpillar, McDonald’s, Amazon and Apple, among others.
Wall Street will also get some key economic data this week. The Conference Board will release its measure of consumer confidence for April today. The Commerce Department will release its first-quarter gross domestic product report on Thursday.
