NEW YORK: Wall Street stocks fell again on Thursday (Jan 19) amid lingering worries over a recession as a top Federal Reserve (Fed) official pledged a tough line on inflation.
Major US indices were in the red the entire session after losing more than 1% on Wednesday, following lacklustre retail sales data that underscored the risk of a downturn in the world’s biggest economy.
Data showing lower-than-expected jobless claims indicated that “despite all the big-tech post-pandemic layoffs, the jobs market remains hot,” said Oanda’s Edward Moya.
“The labour market needs to break to allow the Fed to comfortably keep rates on hold,” he added.
The Dow Jones Industrial Average fell 252.4 points, or 0.76%, to 33,044.56, the S&P 500 lost 30.01 points, or 0.76%, to 3,898.85 and the Nasdaq Composite dropped 104.74 points, or 0.96%, to 10,852.27.
“What we are seeing is the market carving out a bottom in the uncertainty so the news is having less of an effect and what we are seeing today is really just a continuation of that,” said Brad McMillan, chief investment officer for Commonwealth Financial Network, an independent broker-dealer in Waltham, Massachusetts.
“The fact we are not seeing more of a reaction says a lot of the bad news is out there.”
The declines came as the yield on the 10-year US Treasury note pushed higher, underscoring worries that the Fed may not be close to pivoting from its tough stance on inflation.
Fed vice chair Lael Brainard vowed to “stay the course” on Thursday, according to prepared remarks for an event in Chicago.
“Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time,” she said.
In the past year, the Fed has raised the benchmark lending rate rapidly from around zero to 4.25-4.50%. Brainard's latest remarks suggest rates will have to stay high for a while.
While markets were broadly lower, petroleum-linked shares advanced as oil prices closed at their highest level since early December.
US giants Chevron gained 1% and ConocoPhillips won 0.9%.
Netflix Inc closed 3.23% lower ahead of its results scheduled for release after the closing bell on Thursday. But the stock rebounded to gain 3.33% after posting subscriber gains for the quarter and the departure of co-founder Reed Hastings as chief executive to an executive chairman role. – AFP, Reuters