Wall Street ends lower as investors gauge Fed’s policy path

  • Losses accelerate as choppy session ends
  • Fed’s Brainard signals slower rate hikes ahead
  • Real estate, the main discretionary declines of the S&P sector
  • Biogen and Lilly rise up over failure of Roche’s Alzheimer’s drug
  • Indices down: Dow 0.63%, S&P 500 0.89%, Nasdaq 1.12%

Nov 14 (Reuters) – Wall Street’s major indexes ended lower on Monday, with the real estate and discretionary sectors leading large declines, as investors digested comments from U.S. Federal Reserve officials on recovery plans. rising interest rates and have been looking for the next catalysts after last week’s big stock market rally.

Losses accelerated towards the end of the sawtooth session, with the focus on Tuesday’s PPI report and markets highly sensitive to inflation data.

Earlier Monday, Fed Vice Chairman Lael Brainard signaled that the central bank would likely slow its interest rate hikes soon. His comments somewhat boosted sentiment for stocks which had been dampened after Federal Reserve Governor Christopher Waller said on Sunday that the Fed may consider slowing the pace of increases at its next meeting, but that does not should not be considered a “softening” in its commitment to lower. inflation.

A massive rally in stocks late last week was sparked by a weaker-than-expected inflation report that boosted investor hopes that the Fed could reverse its monetary tightening that has hurt markets this year.

“There’s always a sensitivity to the Fed’s rhetoric… One was a bit hawkish, the other was a bit dovish,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.

The Dow Jones Industrial Average (.DJI) fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 (.SPX) lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite (.IXIC) fell 127.11 points, or 1.12%, to 11,196.22.

Last week, the S&P 500 posted its biggest weekly percentage gain since late June, while the tech-heavy Nasdaq (.IXIC) had its best week since March.

Raindrops hang from a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York, New York, U.S., October 26, 2020. REUTERS/Mike Segar/File Photo

Other Fed officials are expected to speak later this week with a slew of data, including on retail sales and housing, and earnings reports from major retailers.

“It makes sense that the market wants to pause and really try to both make sense of the trajectory (of Fed policy) and what the next drivers will be,” said strategist Yung-Yu Ma. Chief Investment Officer at BMO Wealth Management.

Among the S&P 500 sectors, real estate (.SPLRCR) down 2.7%, consumer discretionary (.SPLRCD) fell 1.7% and financials (.SPSY) down 1.5%.

In company news, Amazon (AMZN.O) shares fell 2.3% as The New York Times reported on Monday that the company plans to lay off around 10,000 people in business and technology jobs as early as this week.

Shares of Biogen Inc. (BIIB.O) and Eli Lilly (LLY.N) gained 3.3% and 1.3% respectively after the bankruptcy of its Swiss rival Roche (ROG.S) Drug candidate for Alzheimer’s disease.

Falling issues outnumbered rising ones on the NYSE by a ratio of 2.23 to 1; on the Nasdaq, a 1.61-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 72 new highs and 74 new lows.

About 11.5 billion shares changed hands on US exchanges, compared to the daily average of 12.1 billion over the past 20 sessions.

Reporting by Lewis Krauskopf in New York, Shubham Batra, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta, Vinay Dwivedi and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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