Stocks lose ground amid recession fears
NEW YORK (AP) — Stocks fell in afternoon trading on Wall Street Thursday as worries build that the U.S. may be headed for a painful recession.
The S&P 500 fell 0.8% as of 12:01 p.m. Eastern. The Dow Jones Industrial Average fell 240 points, or 0.7%, to 33,057 and the Nasdaq fell 1.1%.
Every major index is on track for a weekly loss after the market kicked off the year with a twoweek rally. Bond yields were steady, but have been moving broadly lower since the beginning of the year. Analysts expect the broader market to remain unsteady as investors try to get a clearer picture of inflation and the economy's path ahead.
"It's very reflective of the conflicting views that investors have with respect to where things are headed here in early 2023," said Greg Bassuk, CEO at AXS Investments.
Reports showed weakness in several areas of the economy, including the housing industry and manufacturing in the mid-Atlantic region, though they weren't quite as bad as expected and the job market appears to remain healthy. They follow worse-than-expected readings a day earlier on retail sales, a cornerstone of the economy, and industrial production.
The latest economic data paint a picture of an economy slowing under the weight of last year's blizzard of rate hikes by the Federal Reserve. The central bank aggressively raised interest rates to purposely slow the economy and cool inflation. The strategy risks hitting the bakes too hard on economic growth and causing a recession.
Several major banks are forecasting at least a mild recession this year as the impact from the Fed's rate increases reverberates through the economy. Inflation has been cooling, but prices are still stubbornly high on many items and are squeezing consumers.