Wall St Falls as Consumer Data Fuels Inflation Concerns

  • JPM reports higher-than-expected third-quarter earnings
  • S&P 500 and Nasdaq post weekly declines
  • US Consumer Confidence Rises in October; inflation estimates worsen
  • Dow down 1.34%, S&P 500 down 2.37%, Nasdaq down 3.08%

NEW YORK, Oct 14 (Reuters) – U.S. stocks fell on Friday as worsening inflation expectations kept intact concerns that the Federal Reserve’s aggressive path of rate hikes could trigger a recession, as investors digesting the early stages of earnings season.

In the final session of a volatile week, stocks opened higher and then reversed course after data from the University of Michigan showed consumer confidence improved in October but inflation expectations worsened as prices rose. gasoline prices. Retail sales data also indicated resilience among consumers.

“The main driver for the market right now is higher interest rates, higher inflation and the Fed will continue to raise its fed funds target,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.

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“The narrative that we have seen peak inflation is not yet in evidence and that is depressing the market.”

On Thursday, a reading of consumer prices (CPI) showed that inflation remained stubbornly high.

Fed officials have been largely in sync in commenting on the need to raise rates, with St. Louis Fed President James Bullard saying in an interview with Reuters that recent CPI data warrants a “distribution.” advance” continues through larger steps of three-quarters of a percentage point, though that doesn’t necessarily mean rates should be raised above the central bank’s most recent projections.

The Dow Jones Industrial Average (.DJI) fell 403.89 points, or 1.34%, to 29,634.83, the S&P 500 (.SPX) lost 86.84 points, or 2.37%, to 3,583.07 and the Nasdaq Composite (.IXIC) it fell 327.76 points, or 3.08%, to 10,321.39.

Friday’s drop marked the 37th time the S&P 500 posted a gain or loss of at least 2% compared to just seven such sessions in all of 2021. For the week, the Dow gained 1.15% , the S&P 500 lost 1.56% and the Nasdaq fell. 3.11%.

Corporate earnings season started to pick up steam and helped the banking index (.SPXBK)which posted a narrow 0.03% gain after JPMorgan Chase & Co.’s quarterly results. (JPM.N)1.66% more, Citigroup Inc. (CN)0.65% more, and Wells Fargo & Co. (WFC.N)1.86% more, boosted the actions of each.

“The message I got from them is that things are looking pretty good from an economic perspective despite the challenges, but they increased loan loss reserves only in anticipation of seeing a further slowdown,” said Brian Jacobsen, senior strategist. Allspring Investments. Global Investments in Menomonee Falls, Wisconsin.

UnitedHealth gained 0.63% as one of only three Dow components to rise the day after the health insurer posted better-than-expected quarterly results and raised its annual forecast.

Analysts now expect third-quarter earnings for S&P 500 companies to have risen just 3.6% from a year earlier, far less than an 11.1% rise expected in early July, according to Refinitiv data.

Kroger Co. (KR.N) shares fell 7.32% after the supermarket chain said it would buy smaller rival Albertsons Companies Inc. (ACI.N) in a $24.6 billion deal.

tesla inc (TSLA.O) plunged 7.55% following media reports that the electric vehicle maker has suspended plans to launch battery cell production at its plant outside Berlin due to technical problems.

Volume on US stocks was 10.88 billion shares, compared to the 11.48 billion average for the full session over the past 20 trading days.

Down issues outnumbered up ones on the New York Stock Exchange by a ratio of 4.20 to 1; on Nasdaq, a ratio of 2.87 to 1 favored decliners.

The S&P 500 posted 5 new 52-week highs and 7 new lows; the Nasdaq Composite posted 71 new highs and 235 new lows.

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Additional reporting by Herbert Lash and Noel Randewich; Edited by Chizu Nomiyama and David Gregorio

Our standards: The Thomson Reuters Trust Principles.

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