US: Stocks end lower on worries over inflation, Fed policy
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[NEW YORK] Wall Street stocks finished sharply lower on Thursday as markets bet that the latest inflation report would compel the Federal Reserve to accelerate efforts to tighten monetary policy and raise lending rates.
Snapping a two-day winning streak, all three major indices finished solidly lower, with the Dow Jones Industrial Average down 1.5 per cent at 35,241.59.
The broad-based S&P 500 fell 1.8 per cent to close at 4,504.09, while the tech-rich Nasdaq Composite Index dropped 2.1 per cent to 14,185.64.
The inflation report showed the US consumer price index climbed 7.5 per cent over the 12 months to January, its largest increase since February 1982 following a bigger-than-expected jump compared to December.
Stocks opened decisively lower, and then recovered most of the losses by midday.
But Wall Street headed south after St. Louis Fed President James Bullard told Bloomberg he would be open to hiking rates outside of regularly scheduled meetings, and would like to see them up to one percent by July.
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Those remarks prompted investors to shift bets towards a bigger interest rate increase in March and helped lift the yield on the 10-year US Treasury note above two per cent.
"We've spent four of the last five days focusing on fundamentals," said Art Hogan, chief strategist at National Securities, noting equity market gains following mostly strong corporate earnings.
But Thursday's comments by Bullard "triggered some giveback," Hogan said.
Among individual companies, Disney jumped 3.4 per cent amid news it added far more subscribers than expected to its Disney+ streaming service in the just-finished quarter while reporting better-than-expected profits.
Mattel was another winner, surging 7.7 per cent as the toymaker reported higher quarterly profits on a 10 per cent rise in revenue to US$1.8 billion.
But Uber fell 6.1 per cent as the ride-hailing company's medium-term profit forecast disappointed investors despite having reported solid fourth-quarter earnings. AFP
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