Stocks fell back as investors weighed the GDP report with rising interest rate concerns.
Stocks fell for a third day in a row on Thursday, continuing the volatile trade of the week, as investors scrutinized new data on the state of the economy and valuations amid fears of a planned rally. Federal Reserve interest rates.
The S&P 500 index fell 0.5%, in correction territory for a third day this week. The Nasdaq composite fell 1.4%.
ONE adjusted, a Wall Street term for a 10% drop from recent highs, is a signal that investors have become more pessimistic about the market and that although the S&P 500 hasn’t closed a day in the region, corrected, but it fell into intraday trading on Monday, Wednesday, and Thursday before recovering. The index is 9.8% below its January 3 high.
Shares of Teslaone of the biggest companies in the S&P 500, which gives more weight to more valuable companies, fell 11.6% on Thursday after the company warned Wednesday afternoon that its troubles Supply chains may limit their electric vehicle production next year.
Shares rebounded as much as 1.8% in early trading after the Commerce Department reported that gross domestic product – the broadest measure of manufactured goods and services – grew 1.7% in the final three months of 2021. At an annualized rate, the economy expanded at its fastest pace since 1984.
Economists saw some positive signs in the report. The increase in consumer spending, which the government says reflects an increase in spending on services such as health care and entertainment, is one. Also notable was the inventory build-up despite supply chain difficulties that companies say are holding them back.
“While normally such a large inventory would be very negative for future growth, in today’s environment it indicates an easing of supply chain problems and means is that consumers will have more products to buy once winter subsides,” Kathy Bostjancic, an economist at Oxford Economics, wrote in a note.
In a separate report on Thursday, the Labor Department said weekly state jobless claims fell last week after three straight weeks of increases. There were 260,000 new unemployment insurance claims, down from 290,000, a drop that could indicate the impact of the Omicron variant on the slowing labor market.
“The downtrend is likely to continue as labor demand remains strong and businesses remain reluctant to lay off workers amid persistent labor shortages,” said Rubeela Farooqi, chief US economist at High Frequency Economics, wrote in a note.
But the stock has been swinging between gains and losses every day this week. On Wednesday, the major indexes fell after Federal Reserve causing investors to worry that it could move too quickly when interest rates start to rise.
The S&P 500, down about 9% since the start of the year, is on track for its worst month since the start of the pandemic.
Market volatility is likely to linger after the Fed’s first rate hike, expected in March, as indicators continue to provide a reason for the central bank to move on. with plans to remove support for the economy. The impact of the Omicron variant on supply chain backlogs could lead to a slowdown in 2022, reversing the inventory build-up in the last three months of last year. Additionally, if rising inflation continues with no signs of slowing down, the Fed will seem compelled to quickly raise interest rates to tame it.
Markets in Europe fluctuated between gains and losses, with the Stoxx Europe 600 index ending the day up 0.7%. Asian markets closed lower after Wednesday’s decline on Wall Street.
Shares of Southwest Airlines fell 2% after the company said in its quarterly earnings report that it expected to report a loss for the first three months of 2022 amid difficulties caused by the Omicron variant.
https://www.nytimes.com/2022/01/27/business/stock-market-today.html Stocks fell back as investors weighed the GDP report with rising interest rate concerns.