Arab Times

Wall St slumps as Big Tech leads de­clin­ers

‘Mar­kets hoped for the Fed to put pol­icy money where the mouth is’

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NEW YORK, Sept 17, (AP): U.S. stocks are lower Thurs­day as Wall Street con­tin­ues to swirl after the Fed­eral Re­serve said it will keep in­ter­est rates at nearly zero for years to help nurse the wheez­ing econ­omy.

The S&P 500 was 1% lower in morn­ing trad­ing, after trim­ming an ear­lier loss that reached 1.6%. It fol­lows up on a volatile day, where the in­dex at first rose fol­low­ing the Fed’s an­nounce­ment be­fore giv­ing out in the last hour of trad­ing to drop to its first loss in four days.

The Dow Jones In­dus­trial Av­er­age fell 165 points, or 0.6%, to 27,866, as of 10:25 a.m. Eastern time, and the Nas­daq com­pos­ite was down 1.7%. The sell­ing was wide­spread, with all 11 sec­tors that make up the S&P 500 lower and the heav­i­est losses in those that are homes to Ama­zon, Face­book and Ap­ple.

Low in­ter­est rates are usu­ally a boon for in­vestors, send­ing stocks soar­ing, and an­a­lysts gave vary­ing pos­si­ble rea­sons for the mar­ket’s weak­ness. Among them: the gloomy out­look Fed Chair Jerome Pow­ell gave for the econ­omy’s prospects and built-up ex­pec­ta­tions in some corners that the Fed would be even more gen­er­ous with its stim­u­lus. This also isn’t the first han­gover stocks have had fol­low­ing a rate an­nounce­ment by the Fed.

Mar­kets “hoped for the Fed to put pol­icy money where the mouth is” but “ended up a tad dis­ap­pointed,” Mizuho Bank said in a re­port. The Fed was “long on talk and short on ac­tion.”

An­other pos­si­bil­ity for the weak­ness is the di­min­ish­ing odds that Congress will de­liver more aid for the econ­omy any­time soon after ben­e­fits for un­em­ployed work­ers and other stim­u­lus ex­pired re­cently.

In­vestors say such aid is cru­cial for the re­cov­ery, and Pow­ell talked about the im­por­tance of it in a press con­fer­ence Wed­nes­day. A re­port on Thurs­day showed that an­other 860,000 work­ers ap­plied for un­em­ploy­ment ben­e­fits last

week. But par­ti­san dis­agree­ments on Capi­tol Hill have held up any re­newal of Con­gres­sional sup­port. “Fun­da­men­tally, the econ­omy is still mov­ing in the right di­rec­tion, but the risk of po­ten­tially jeop­ar­diz­ing the re­cov­ery from re­duced fis­cal sup­port is be­com­ing un­com­fort­ably high,” Piper San­dler strate­gist Craig John­son wrote in a re­port.

Econ­o­mists say the im­pact of Congress’ in­ac­tion may al­ready be show­ing in the data. Re­tail sales growth weak­ened last month, for ex­am­ple, as un­em­ployed work­ers were no longer get­ting $600 in ex­tra weekly ben­e­fits from the fed­eral gov­ern­ment. Pres­i­dent Don­ald

Trump is­sued an ex­ec­u­tive or­der in early Au­gust to pro­vide a scaled-back ver­sion of the ben­e­fits, but that pro­gram is ex­pir­ing.

Trump urged his fel­low Repub­li­cans on Wed­nes­day to move to­ward a big pack­age of aid, which is what Democrats have been ar­gu­ing for, but ne­go­ti­a­tions still re­main far apart.

The num­ber of work­ers ap­ply­ing for job­less ben­e­fits has been com­ing down slowly, but it re­mains in­cred­i­bly high com­pared with his­tory.

Big Tech stocks were again at the cen­ter of Wall Street’s sell­ing. After fly­ing through the pan­demic on ex

pec­ta­tions that their strong growth will only con­tinue, Ap­ple and other su­per­star stocks sud­denly lost momentum ear­lier this month amid wor­ries they had be­come too ex­pen­sive. Ap­ple fell 2%, Ama­zon sank 3% and Face­book lost 2.4%.

Among the few gain­ers was Her­man Miller, which jumped 28.9% after re­port­ing much stronger profit for its lat­est quar­ter than an­a­lysts ex­pected. It ben­e­fited from a rush of peo­ple buy­ing fur­ni­ture for home of­fices they had to sud­denly set up due to the pan­demic.

Trea­sury yields fell in a sign of in­creased cau­tion in the mar­ket. The

yield on the 10-year Trea­sury fell to 0.65% from 0.69% late Wed­nes­day.

Stocks in mar­kets around the world were also weak.

In Europe, the Ger­man DAX lost 0.5%, and the French CAC 40 fell 0.6%. The FTSE 100 in Lon­don sank 0.2%.

Asian stock mar­kets tum­bled Thurs­day after the U.S. Fed­eral Re­serve in­di­cated its bench­mark in­ter­est rate will stay close to zero at least through 2023 but an­nounced no ad­di­tional stim­u­lus plans.

Mar­ket bench­marks in Shang­hai, Tokyo, Seoul and Hong Kong all re

 ??  ?? Cur­rency traders work at the for­eign ex­change deal­ing room of the KEB Hana Bank head­quar­ters in Seoul, South Korea on Sept 17. Asian stock mar­kets de­clined Thurs­day after the US Fed­eral Re­serve in­di­cated its bench­mark in­ter­est rate will stay close to zero at least through 2023 but an­nounced no ad
di­tional stim­u­lus plans. (AP)
Cur­rency traders work at the for­eign ex­change deal­ing room of the KEB Hana Bank head­quar­ters in Seoul, South Korea on Sept 17. Asian stock mar­kets de­clined Thurs­day after the US Fed­eral Re­serve in­di­cated its bench­mark in­ter­est rate will stay close to zero at least through 2023 but an­nounced no ad di­tional stim­u­lus plans. (AP)

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