US: Stocks drop as more companies report supply chain woes

[NEW YORK] Wall Street stocks ended lower on Wednesday on worries over the economic hit from the latest coronavirus wave and as more large companies reported supply chain problems amid the pandemic.

A report from the Federal Reserve said economic growth "downshifted slightly" in July and August amid shortages of workers and materials and as the Delta variant caused an uptick in Covid-19 cases.

Also Wednesday, John Williams, president of the Fed's New York branch, cautioned in a speech that "a full recovery from the pandemic will take quite some time to complete."

The Dow Jones Industrial Average dropped 0.2 per cent to finish trading at 35,031.07.

The broad-based S&P 500 slipped 0.1 per cent to close at 4,514.07, while the tech-rich Nasdaq Composite Index fell 0.6 per cent to 15,286.64.

More US companies pointed to persistent problems with supply chains that have led to shortages of key materials and pricing pressure.

Sherwin-Williams fell 2.0 per cent after the paint company cut its third-quarter sales forecast due in part to a shortage of some raw materials linked to outages from Hurricane Ida, making it hard for the company to meet strong demand.

And homebuilder PulteGroup slumped 6.0 per cent after warning that supply chain problems and shortages of key building products would slow some closings.

"Despite the extraordinary efforts of our trade partners, the supply chain issues that have plagued the industry throughout the pandemic have increased during the second half of the year," said PulteGroup Chief Executive Ryan Marshall.

AFP