Wall Street falls as official comments from the hawkish Fed weigh in

  • Fed’s Bullard backs more interest rate hikes
  • Data show that the US labor market remains tight
  • Cisco shares rise after co raises full-year outlook
  • Macy’s jumps on increase in profit forecast
  • Indexes down: Dow 0.02%, S&P 0.31%, Nasdaq 0.35%

Nov 17 (Reuters) – Wall Street’s main indexes ended modestly lower on Thursday in a choppy session as hawkish comments from a U.S. Federal Reserve official and data showing the labor market remained tight led some investors to worry about more aggressive rate hikes.

St. Louis Fed President James Bullard said the central bank must continue to raise interest rates given that tightening so far “had only limited effects on observed inflation.”

Stocks have pulled back in recent days after a strong month-long rally spurred by softer-than-expected inflation reports that raised hopes the Fed would moderate its rate hikes.

“The Fed is still talking up interest rates in general,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “There may be disagreement about the pace. But interest rates will not come down anytime soon.”

Stocks pared losses late in the session, but the major indexes still finished in negative territory.

The Dow Jones Industrial Average (.DJI) fell 7.51 points, or 0.02%, to 33,546.32, the S&P 500 (.SPX) lost 12.23 points, or 0.31%, to 3,946.56 and Nasdaq Composite (.IXIC) 70 points. 0.35% to 11,144.96.

Data showed the number of Americans filing new claims for unemployment benefits fell last week, suggesting the labor market remained tight. A report on Wednesday detailed strong retail sales growth last month, indicating that the economy has been through rate hikes.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 15, 2022. REUTERS/Brendan McDermid/File Photo

Bets by traders on a 75 basis point increase on the Fed’s next meeting rose to 19% from about 15% a day earlier, according to CME Group’s FedWatch tool. Most investors still expect an increase of 50 basis points.

Cisco Systems ( CSCO.O ) shares rose 5% after the company raised its full-year revenue and profit forecast with supply chain easing. The stock helped the S&P 500 information technology sector (.SPLRCT) gain 0.2%.

However, most S&P 500 sectors ended lower, with utilities (.SPLRCU) off 1.8% and consumer discretionary (.SPLRCD) down around 1.3%.

In company news, shares of Macy’s ( MN ) rose 15% after the department store chain raised its annual earnings forecast on robust demand for high-end apparel and beauty products.

Falling issues outnumbered exits on the NYSE by a ratio of 2.06 to 1; on the Nasdaq a 1.65 to 1 ratio favored decliners.

S&P 500 posted 1 new 52-week high and 1 new low; The Nasdaq Composite registered 46 new highs and 169 new lows.

About 10.3 billion shares changed hands on US exchanges, compared to the 12.1 billion daily average over the past 20 sessions.

Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi, Arun Koyyur and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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