Stocks fall again, further wiping out summer gains | Technology

By ALEX VEIGA – AP Business Writer

Stocks are broadly down on Wall Street on Thursday afternoon, extending their losing streak to a fifth day as investors remain wary of the resilience of the economy as the Federal Reserve raises interest rates to fight against inflation.

The S&P 500 was down 0.6% at 2:20 p.m. EST. The Dow Jones Industrial Average fell 43 points, or 0.1%, to 31,470 and the Nasdaq composite slipped 1.5%.

The main indexes have closed lower for four days in a row. The latest wave of selling continues an area of ​​weakness that wiped out much of the gains the market made in July and early August.

Technology stocks again represented the heaviest weighting in the market. Nvidia fell 10% after the chipmaker said the US government imposed new licensing requirements on its sales to China.

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Financial sector stocks and companies that rely on consumer spending also helped drag the market lower. American Express fell 1.8% and cruise line Carnival fell 2.5%.

Energy stocks fell as the price of U.S. crude oil, just off its third month of declines, fell 3.6% to $86.32 a barrel. Chevron slipped 1.5%.

Healthcare stocks were a bright spot. Johnson & Johnson rose 2.2%.

Stocks of smaller companies also lost ground, dragging the Russell 2000 Index down 2.1%. In Europe, major equity indices fell. Asian markets closed lower.

Treasury yields were higher overall. The 10-year Treasury yield, which influences interest rates mortgages and other consumer loans, rose to 3.26% against 3.20% on Wednesday evening. The two-year Treasury yield, which tends to track expectations for Fed action, rose to 3.54% from 3.50%.

Bond yields rose alongside expectations of higher interest rates, which the Federal Reserve raised in an effort to crush the highest inflation in decades.

Markets have been on a losing streak since last week, when Federal Reserve Chairman Jerome Powell indicated that the central bank will likely have to keep interest rates high enough to slow the economy “for a while” in order to bring down inflation.

The Fed has already raised interest rates four times this year and is expected to raise short-term rates by 0.75 percentage points at its next meeting later this month, according to CME Group.

Wall Street worries that the Fed could put the brakes on an already slowing economy too hard and push it into a recession. Rising interest rates have also hurt investment prices, especially for more expensive stocks like technology companies.

The S&P 500 ended August with a 4.2% loss after jumping 9.1% in July on optimism that the Fed might be able to slow rate hikes following the signs that inflation, although still high, was stabilizing.

The July and early August market rally marked a brief positive turn for Wall Street after a weak first half where the S&P 500 fell 20% from its most recent peak and entered a bear market. September may not offer investors much respite, as historically it tends to be worst month for stocks.

Investors are watching economic data closely for any further signs of the economy slowing down or inflation slowing or at least staying at its current level. Businesses and consumers have been hit hard by rising prices for everything from food to clothing, but recent drops in gasoline prices have brought some relief.

Strong US jobs data helped fuel expectations of further interest rate hikes. The Ministry of Labor announced on Tuesday that there were two jobs for every unemployed person in July, giving ammunition to Fed officials who argue the economy can tolerate more rate hikes to rein in inflation, which is at its highest in decades.

On Thursday, the Department of Labor said that applications for unemployment benefits fell last week, the latest sign that the labor market is continuing to shine despite the slowing U.S. economy.

The government’s August jobs report, due out on Friday, is also expected to show that the labor market remains robust.

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