Stocks fell on Friday as Wall Street headed for a big losing week, and traders digested an ugly earnings warning from FedEx about the global economy.
The Dow Jones Industrial Average fell 335 points, or 1.1%. The S&P 500 and Nasdaq Composite were down 1.2% and 1.4%, respectively.
FedEx shares fell 24% after the shipping company I pulled the whole year directives It said it would implement cost-cutting initiatives to counter weak global shipment volumes as the global economy “significantly deteriorates”.
Transportation stocks are usually seen as a leading economic indicator, so the FedEx announcement may contribute to broader declines on Friday.
“It’s pretty much a leader, certainly in a traditional sense,” Robert Teeter of Silvercrest Asset Management said on CNBC’s “Worldwide Exchange.” “[But] I think one of the things we’ve seen in this pandemic and post-pandemic economy is that different sectors have different cycles.”
“There is no doubt that the news was not positive, which is certainly an indication of the importance of moving forward with margins, which we believe is a company issue,” Tetter added.
The three major averages were on track for their fourth week of losses in five as the price rally looks increasingly like a bear market bounce. The Dow Jones Industrial Average is down 4.9% this week, while the S&P 500 is down 5.3%. The Nasdaq Composite is down 6.1%, heading for its worst weekly loss since June.
The bulk of Tuesday’s losses came after a surprisingly heated reading in the August CPI report, with the Dow losing 1,200 points in its worst drop in two years.
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