NEW YORK: Wall Street stocks finished a volatile session mostly lower on Tuesday (Oct 11) following a downcast International Monetary Fund (IMF) economic forecast, as investors gird for a difficult earnings season.
The Dow Jones Industrial Average rose 36.44 points, or 0.12%, to 29,239.32, the S&P 500 lost 23.65 points, or 0.65%, to 3,588.74 and the Nasdaq Composite dropped 115.91 points, or 1.1%, to 10,426.19.
The IMF projected 2023 growth of 2.7%, 0.2 point down from July expectations in light of rising inflation, toughening actions from central banks and uncertainty after the Russian invasion of Ukraine.
Despite the forecast, major indices pushed into positive territory in the afternoon but weakened again following comments by Bank of England governor Andrew Bailey that the central bank would end emergency bond-buying efforts on Friday, rebuffing calls for a longer programme to allow markets to stabilise.
The forecast comes ahead of critical US inflation data and third-quarter earnings season, which investors fear may reveal the growing risk of a recession.
“The macro backdrop keeps getting uglier given the latest escalation with the war in Ukraine and growing fears that stagflation might force central bankers globally (to) remain aggressive with tightening and that will trigger severe recessions,” said Oanda’s Edward Moya.
“What caused the latest downturn was an announcement the Bank of England was going to stop supporting the gilt (UK bonds) market in three days,” said Randy Frederick, managing director, trading and derivatives at Charles Schwab in Austin. – AFP, Reuters