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US stocks fall again on recession fears

2022-09-23 HKT 04:46
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  • Wall Street stocks feel for a third straight session. File photo: AFP
    Wall Street stocks feel for a third straight session. File photo: AFP
Major Wall Street indexes ended lower on Thursday, falling for a third straight session as investors reacted to the Federal Reserve's latest aggressive move to rein in inflation by selling growth stocks, including technology companies.

The Fed lifted rates by an expected 75 basis points on Wednesday and signalled a longer trajectory for policy rates than markets had priced in, fuelling fears of further volatility in stock and bond trading in a year that has already seen bear markets in both asset classes.

The US central bank's projections for economic growth released on Wednesday were also eye-catching, with growth of just 0.2 percent this year, rising to 1.2 percent for 2023.

The Dow Jones fell 0.35 percent, to 30,076, the S&P 500 lost 0.84 percent, to 3,757 and the Nasdaq dropped 1.37 percent, to 11,066.

Jitters were already present in the market after a number of companies – most recently FedEx Corp and Ford Motor Co – issued dire outlooks for earnings.

Shares of megacap technology and growth companies such as Amazon, Tesla and Nvidia fell between 1 percent and 5.3 percent as benchmark US Treasury yields hit an 11-year high.

Rising yields weigh particularly on valuations of companies in the technology sector, which have high expected future earnings and form a significant part of the market-cap weighted indexes such as the S&P 500.

Major US airlines – which have enjoyed a rebound amid increased travel as pandemic restrictions end – were also down, with United Airlines and American Airlines falling 4.6 percent and 3.9 percent respectively. This took losses in the last three days to 11 percent for United and 10.6 percent for American. (Reuters)

US stocks fall again on recession fears