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Tech stocks lead Wall Street lower, breaking winning streak | app


Ap Business Writers

Wall Street capped off a choppy week of trading on Friday with a broad decline in stocks that left major indexes in the red for the week.

The S&P 500 closed down 1.3%, snapping a four-week winning streak. Shares of more than 80% of companies in the benchmark fell, with tech stocks driving much of the pullback.

The tech-heavy Nasdaq composite fell 2% and also ended four weeks of gains. The Dow Jones Industrial Average fell 0.9%, ending slightly in the red for the week. Small company stocks also lost ground, driving the Russell 2000 Index down 2.2%.

Friday marked the market’s biggest sell-off, including the S&P 500’s biggest drop in more than seven weeks, after a strong run of weekly gains. The strong market rally in July and early August followed better-than-expected corporate earnings and signs of a slowing economy, perhaps paving the way for less aggressive rate hikes, the main policy tool. the Federal Reserve to control soaring inflation.

Minutes of the central bank’s interest rate policy meeting last month and recent statements from Fed officials seem to indicate that the Fed may not yet be ready to abandon its rate hike pace, said Quincy Krosby, chief equity strategist for LPL Financial.

“It put the market on notice that it may have to deal with a Fed that continues to raise rates at a steady pace and may not stop and let up the pedal,” he said. she declared.

This gave traders “the perfect excuse to finally start burning” some of the market’s recent gains.

The S&P 500 fell 55.26 points to 4,227.48. It ended with a loss of 1.2% for the week and is now down 11.3% so far this year.

The Dow Jones lost 292.30 points to 33,706.74, while the Nasdaq slipped 260.13 points to 12,705.22. The Russell 2000 gave up 43.38 points at 1,957.35.

Tech stocks suffered some of the biggest losses, and the sector’s decline weighed heavily on the market as a whole. Microsoft fell 1.4%.

Retailers, banks and communications companies also fell sharply amid the general decline.

meme stock Bed bath and beyond fell 40.5% after top activist investor Ryan Cohen confirmed he had sold his stake in the company.

Cryptocurrencies fell sharply as Bitcoin fell 8.5% to $21,370, according to CoinDesk.

Positives included General Motors, which rose 2.5% after restoring its dividend. Foot Locker soared 20% after replacing its CEO and reporting earnings above Wall Street estimates.

Bond yields gained ground, reflecting expectations of further interest rate hikes. The 10-year Treasury yield rose to 2.97% from 2.89% on Thursday evening.

Traders had no shortage of business and economic data to review this week, including the latest batch of retailer earnings and updates on spending, home sales and the job market.

Major retailers, including walmart and Target warned investors that inflation is dampening consumer spending. The owner of the Macy’s department store will release its results next week.

A retail sales report this week has shown that spending remains resilient as gasoline prices fall and help ease some inflationary pressures.

Wall Street is trying to gauge how stubbornly high inflation is affecting businesses and consumers and whether the economy can remain resilient and avoid a recession.

Data from government and corporate reports are also being closely watched as investors try to determine how the Federal Reserve will continue its plan to fight inflation by raising interest rates. The objective is to raise rates and slow economic growth to calm inflation. But the central bank is drawing a fine line between controlling inflation in an already slowing economy and braking too hard and tipping the economy into a recession.

Minutes from the Fed’s July meeting released this week indicate that inflation is still too high and make it clear that the central bank will continue to raise interest rates. The central bank has raised interest rates twice this year by 0.75 percentage points, triple its usual margin. Forecasters are currently expecting a hike of half a percentage point at the next board meeting.

Wall Street will be closely watching Federal Reserve Chairman Jerome Powell’s speech next week at an annual conference in Jackson Hole, Wyoming.

“The question is does he engage the market with his assessment of the direction of inflation, the progress the Fed is making and does he offer any suggestion on the direction of rate hikes?” said Crosby.

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