S&P, Dow Jones decline as resilient economic data stokes concerns of a rate hike

(Reuters) – Wall Street mostly fell in choppy trading Thursday, as the S&P 500 is on track for its fifth consecutive daily decline. The Dow Jones Industrial Average also fell, as investors remained wary of further interest rate increases due to the recent rally. in interest rates. Strong US economic data.

On a volatile day, the Nasdaq Technologies Index rose slightly, retreating from an earlier session high of more than 1%. Megacap shares were mixed, with Tesla Inc (TSLA.O) rising and Amazon.com Inc (AMZN.O) falling.

Stock markets have been volatile this month, with the S&P 500 down more than 4% in the past six sessions, as data pointing to a strong economy and hawkish comments by Federal Reserve officials dampened appetite for risky assets.

The number of Americans filing new applications for unemployment benefits fell unexpectedly last week, the Labor Department said, reflecting difficult labor market conditions.

A separate report confirmed that the economy grew strongly in the fourth quarter, though higher inventory levels were responsible for much of the increase.

US gross domestic product increased 2.7% in the most recent quarter, according to the government’s second estimate. Economists had expected a rise of 2.9%.

“Any growing piece of economic data that builds a story that bears in the market that the rally so far is a false euphoria, and that weighs more heavily on the market than the good news from some of these earnings,” said Peter Andersen, the firm’s founder. Andersen Capital Management.

Analysts polled by Reuters expect a correction within the next three months although they expect the S&P 500 (.SPX) to rise 5% by the end of the year.

Currently, the S&P is testing both the 50-day moving average at 3,980 points and the 200-day moving average at 3,940.

Nvidia Corp. (NVDA.O) stock rose 14.2% to its highest level in more than 10 months after the company forecast higher-than-estimated quarterly sales and reported an increase in the use of its chips to support artificial intelligence services.

Other chipmakers, including Broadcom Inc (AVGO.O) rose 0.4%, and Qualcomm Inc (QCOM.O) rose 0.8%. Philadelphia SE Semiconductor (.SOX) rose 2.5%.

At 2.06 pm ET, the Dow Jones Industrial Average (.DJI) fell 97.71 points, or 0.3%, to 32947.38, the S&P 500 (.SPX) lost 0.92 points, or 0.02%, to 3990.13 points, and the Nasdaq Composite Index (.IXIC) ). It added 6.36 points, or 0.06%, to 11,513.43 points.

Eight of the 11 major S&P 500 sectors declined, with Communications Services (.SPLRCL) down 1.1%, dragged down by a 3.8% drop in Netflix Inc (NFLX.O) on reports that the streaming service was cutting subscription prices in 30 years. nation.

The telecoms services index was on track for its fifth straight decline, which would be its biggest since another five-loss streak in October.

Energy (.SPNY) was among the few gainers, up 1.3% on higher crude oil prices. Should the index continue to advance, it would halt its losing run at seven, tying its worst stretch since an eight-session slide in March 2017.

Among other stocks, eBay Inc (EBAY.O) fell 5.8% after warning of weak demand in the first half of 2023 due to strained consumer spending in the United States and Europe.

Moderna Inc (MRNA.O) fell 8.4% after the vaccine maker reaffirmed its $5 billion annual sales forecast for COVID-19 vaccines despite last quarter sales beating estimates.

Additional reporting by Johan M. Cherian and Sruthi Shankar in Bengaluru and David French in New York; Editing by Savio D’Souza, Arun Koyyur, Anil D’Silva and David Gregorio

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