Stocks fell sharply on Thursday after new data showed that retail sales fell more-than-expected in November, raising fears that the Federal Reserve’s relentless interest rate hikes are tipping the economy into recession.
The Dow Jones Industrial Average fell 918 points, or 2.7%, heading for its worst day since September as hopes of a year-end rally waned. The S&P 500 fell 2.77%, bringing its decline for the month of December to nearly 5%. The Nasdaq Composite fell 3.33% as the heavy tech index extended its losses in 2022 to more than 31%.
The sell-off was widespread with only 14 S&P 500 stocks trading in positive territory. Big tech stocks fellwith shares apple And the the alphabet Down more than 4% and shares Microsoft And the Amazon less than 3%. Netflix shares fell more than 9% distance Digiday Report which said the broadcast company is offering to refund advertisers after missing viewership targets.
The largest declines in the Dow index of the year
| Date | points | % |
|---|---|---|
| 09/13/2022 | -1,276 | -3.94 |
| 05/18/2022 | -1,165 | -3.57 |
| 05/05/2022 | -1,063 | -3.12 |
| 08/26/2022 | -1,008 | -3.03 |
| 04/22/2022 | -981 | -2.82 |
| 06/13/2022 | -876 | -2.79 |
| 04/29/2022 | -939 | -2.77 |
| 06/10/2022 | -880 | -2.73 |
| 12/15/2022 | -907 | -2.67 |
| 06/16/2022 | -741 | -2.42 |
Disappointing retail sales report The proposed inflation has a negative impact on consumers. Retail sales fell 0.6% in November, according to the Commerce Department. That was a bigger loss than the Dow Jones estimate of a 0.3% decline.
Selling began on Wednesday in the wake of the latest Fed release Overnight borrowing rate increased. The central bank also said it would continue to raise interest rates through 2023 and expected the federal funds rate to peak at 5.1% higher than expected. With Wednesday’s rise of half a percentage point, the target range for rates is currently between 4.25% and 4.5%, the highest in 15 years.
The Dow closed below 34,000 on Wednesday and then selling intensified on Thursday after weak retail sales data. Treasury yields continued to defy the Fed and were pulled back by concerns that the central bank is going too far. The 10-year yield is down to less than 3.5%.
Banking stocks also fell as fears of a recession grew. c. B. Morgan Chase And the American bank Each of them lost more than 2%.
“People assume that earnings will decline, but that’s how big that decline is and how fast it’s happening — we think that’s where the surprise is,” Morgan Stanley strategist Mike Wilson said Thursday on CNBC’s “Squawk Box.”
“It’s the negative operating leverage that we’re seeing from lower inflation…that’s going to hurt margins, and that’s regardless of whether or not there’s a recession,” Wilson added.
— CNBC’s Michelle Fox contributed to this report.
“Twitteraholic. Total bacon fan. Explorer. Typical social media practitioner. Beer maven. Web aficionado.”