- US factory orders are up more than expected
- Shares linked to commodities, shares of banks fall
- Indices are down: Dow 1.59%, S&P 1.20%, Nasdaq up 0.09%
July 5 (Reuters) – The S&P 500 and Dow fell on Tuesday, with investors worried about the possibility of a recession as central banks around the world take aggressive action to curb rising inflation.
U.S. equities have come under relentless selling pressure this year, with the S&P 500 benchmark index (.SPX) hitting its sharpest percentage drop in the first half since 1970, as the Federal Reserve s moves away from the easy money policy by increasing the costs of borrowing.
Investors now expect minutes from the Fed meeting in June on Wednesday as they prepare for another 75 basis point rate hike later this month.
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Traders are also monitoring economic data, including the U.S. payroll report scheduled for Friday, and corporate comments on signs of peak inflation and economic growth as regular trading began after a headwind. week long and with the earnings season on the brink.
“Concerns about the recession dominate the market,” said Sam Stovall, CFRA’s chief investment strategist.
“The real question is whether the economy is slowing, to what extent earnings or second-quarter guidance will disappoint. People are waiting until they receive some news that could serve as a catalyst.”
The data showed that new orders for U.S.-made goods rose more than expected in May, showing that demand for products remains strong even as the Fed aims to cool the economy. Read more
Separately, business growth in the eurozone slowed further in June and European natural gas prices rose again, fueling concerns about a recession on the bloc. Read more
“Profit projections were being held artificially. Over the next two weeks, everyone will start lowering estimates and we expect to see a significant amount of volatility,” said Dan Genter, executive director of Genter Capital Management.
US Treasury bond benchmark yields fell on Tuesday and a key portion of the yield curve was reversed for the first time in three weeks as concerns about economic growth reduced risk appetite and increased of US Shelter Debt Demand.
Bank shares, which are sensitive to the economic outlook, fell. The S&P 500 banking index (.SPXBK) fell 2.1%, more than the 1.9% fall in the financial sector (.SPSY).
Energy stocks (.SPNY) reached lows of five months as fears of recession darkened the outlook for oil demand. The materials sector (.SPLRCM) stood at a minimum of a year and a half, as a fall in metal prices affected mining stocks.
At 12:23 pm ET, the Dow Jones Industrial Average (.DJI) was down 492.96 points, or 1.59%, at 30,604.30, the S&P 500 (.SPX) was down 45.90 points, or 1 , 20%, to 3,779.43.
The Nasdaq Composite (.IXIC) rose 10.47 points, or 0.09%, to 11,138.31, reducing anticipated losses.
Shares of Warner Bros. Discovery Inc (WBD.O) fell 1.5% after reports from the media and streaming unit, HBO Max, stopped production of original shows in Europe.
The decline in emissions outnumbered the advanced ones with a ratio of 2.97 to 1 on the NYSE and a ratio of 1.31 to 1 on the Nasdaq.
The S&P index recorded a new high of 52 weeks and 51 new lows, while the Nasdaq recorded 10 new highs and 280 new lows.
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Report by Amruta Khandekar and Shreyashi Sanyal in Bangalore; Assembly by Anil D’Silva and Shounak Dasgupta
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