US: Dow loses 1% on resurgent Federal Reserve fears
SOLID US hiring data translated into another round of interest rate angst on Thursday, with US stocks ending sharply lower ahead of an upcoming government jobs report.
Private employment bounced by 235,000 jobs in December, more than analysts expected, with job creation robust across small and medium establishments, according to an ADP survey. The data follows Federal Reserve meeting minutes released on Wednesday that continued to suggest a hard line on inflation after multiple interest rate hikes in 2022.
“It’s back to ‘good news is bad news,’” said Cresset Capital’s Jack Ablin, referring to the labour market resilience that has fueled worries of more Fed interest rate increases.
The Dow Jones Industrial Average finished down 1.0 per cent at 32,930.08. The broad-based S&P 500 shed 1.2 per cent to 3,808.10, while the tech-rich Nasdaq Composite Index dropped 1.5 per cent to 10,305.24. Thursday’s drop comes ahead of Friday’s government jobs report for December. Analysts expect the US economy added 210,000 jobs in December and that the unemployment rate stayed at 3.7 per cent. Among individual companies, Amazon shed 2.4 per cent as it announced it was cutting 18,000 jobs in the largest downsizing of the online giant’s history.
Other large tech names also had a rough session, with Microsoft losing 3.0 per cent and Google parent Alphabet 2.2 per cent.
Bed Bath & Beyond sank around 30 per cent as it warned that there is “substantial doubt about the Company’s ability to continue as a going concern,” a sign it could file for bankruptcy.
The retailer said it expected a loss of US$386 million in the just-finished quarter. On the other hand, food company Conagra jumped 3.4 per cent as it reported better-than-expected profits behind strong pricing. AFP
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