by Chuck Mikolajczak
NEW YORK (Reuters) – The New York Stock Exchange ended lower for a third straight session on Friday as fears grew that the U.S. Federal Reserve could push the economy into recession with its continued stimulus measures. monetary tightening to fight inflation.
The Dow Jones Industrial Average fell 0.85% or 281.76 points to 32,920.46 points.
The broader S&P-500 lost 43.39 points, or 1.11%, to 3,852.36.
The Nasdaq Composite fell by 105.11 points (0.97%) to 10,705.41 points.
All three major Wall Street indexes are down weekly. The Dow Jones lost 1.66%, the S&P-500 2.09% and the Nasdaq 2.72%.
While the Fed’s decision, announced on Wednesday, to raise interest rates by 50 basis points was expected, stocks came under further pressure after comments from the head of the US central bank.
Jerome Powell hinted after the release of the Fed’s statement that monetary tightening would continue into 2023, with interest rates seen above 5% – a threshold more seen since the 2007 economic low.
Statements by other central bank officials since then have fueled market concerns. New York Fed President John Williams said on Friday that interest rates could rise more than expected next year and said Fed policy would not lead to a recession.
“Again, like deja vu, the market seems to have been in a bit of a rush as to how and when the Federal Reserve will become more conservative and start speaking in terms that will make the market understand when it will be less restrictive,” said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.
“The market is now more fearful of a policy that will remain so restrictive… There are fears that a policy failure is more likely,” he added.
A survey released on Friday showed that economic activity in the United States worsened more than expected in December as new orders fell to a more than two-and-a-half-year low.
All the major sectors in the S&P-500 fell, especially real estate, which lost nearly 3%.
On the stock side, Meta Platforms rose 2.82% after JP Morgan revised its recommendation upwards.
Adobe rose 2.99% after a first-quarter 2023 earnings forecast that beat expectations.
(French version Jean Terzian)
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