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- FedEx profit warning hits competitors
- All three major US indexes are posting sharp weekly declines
- Investors are eyeing next week’s Fed meeting
- Indices down: Dow 0.45%, S&P 0.72%, Nasdaq 0.90%
NEW YORK, Sept 16 (Reuters) – US stocks ended lower on Friday, falling to two-month lows as a warning of an imminent global slowdown by FedEx hastened investors’ flight to safety at the end of a tumultuous week.
All three major US stock indexes slipped to levels not seen since mid-July, with the S&P 500 closing below 3,900, a closely watched support level.
The S&P 500 and Nasdaq tumbled across the finish line in a week riddled with inflation worries, looming interest rate hikes and ominous economic warning signs, and suffered their worst weekly percentage falls since June.
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“It’s been a tough week. It feels like Halloween came sooner,” said David Carter, chief executive officer of JPMorgan in New York. “We are facing this toxic concoction of high inflation, high interest rates and low growth that is not good for either the stock or bond markets.”
Risk-off sentiment rose from simmer to simmer after FedEx Corp withdrew its earnings forecast late Thursday, citing signs of slowing global demand. Continue reading
FedEx’s move followed statements from the World Bank and IMF, both of which warned of an imminent global economic slowdown. Continue reading
A flurry of mixed economic data, dominated by a hotter-than-expected inflation (CPI) report, cemented a rate hike of at least 75 basis points at the close of next week’s Fed monetary policy meeting.
“While the market is anticipating a big hike in Fed rates next week, there is tremendous uncertainty and concern about future rate hikes,” Carter added. “The Fed is doing what it has to do. And after some pain, the markets and the economy will heal themselves.”
According to CME’s FedWatch tool, financial markets have priced in an 18% chance of an outsized 100 basis point hike in the Fed’s target fund rate on Wednesday. .
The Dow Jones Industrial Average (.DJI) fell 139.4 points, or 0.45%, to 30,822.42, the S&P 500 (.SPX) lost 28.02 points, or 0.72%, to 3,873.33 and the Nasdaq Composite (.IXIC) fell 103.95 points, down 0.9% to 11,448.40.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 7, 2022. REUTERS/Brendan McDermid/File Photo
Nine of the S&P 500’s 11 major sectors ended in negative territory, with Energy (.SPNY) and Industrials (.SPLRCI) suffering the largest percentage declines.
Dow Transports (.DJT), considered a barometer of economic health, fell 5.1%.
That decline was led by a 21.4% drop in FedEx stock, the largest decline in the S&P 500.
Peers United Parcel Service (UPS.N) and XPO Logistics (XPO.N) fell 4.5% and 4.7%, respectively, while Amazon.com Inc (AMZN.O) fell 2.1%.
The meeting also marked the monthly options expiration, which takes place on the third Friday of each month. Options hedging activity has amplified market movements this year and contributed to increased volatility.
The CBOE Market Volatility Index (.VIX), often referred to as “the fear index,” hit a two-month high, surpassing levels associated with heightened investor anxiety. Continue reading
Declining issues predominated on the NYSE at a 3.04 to 1 ratio; on the Nasdaq, a 2.24 to 1 ratio favored decliners.
The S&P 500 posted no new 52-week highs and 56 new lows; the Nasdaq Composite posted 21 new highs and 387 new lows.
Volume on US exchanges was 16.92 billion shares compared to the average of 10.72 billion for the entire session over the last 20 trading days.
(This story is refiled to include the omitted word “like” in the citation, paragraph 4.)
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Reporting by Stephen Culp; additional reporting by Devik Jain and Ankika Biswas in Bengaluru; Editing by Grant McCool
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