Wall Street falls as FedEx warning adds to market woes
Wall Street closed out the stock market’s worst week in three months with more losses Friday, as a stark warning from FedEx about rapidly worsening trends in the economy rattled already anxious investors.
The S&P 500 fell 0.7%, with all but two of its 11 company sectors ending in the red. The benchmark index sank 4.8% for the week, with much of the loss coming from a 4.3% rout on Tuesday following a surprisingly hot report on inflation. The last time it posted a bigger weekly decline was the week ended June 17.
The Dow Jones Industrial Average fell 0.5% and the Nasdaq composite dropped 0.9%. The Russell 2000 index of smaller companies took the heaviest losses, falling 1.5%.
All the major indexes have now posted losses four out of the past five weeks.
FedEx sank 21.4% for its biggest single-day sell-off on record after warning investors that profits for its fiscal first quarter will likely fall short of forecasts because of a drop-off in business. The package delivery service is also shuttering storefronts and corporate offices and expects business conditions to further weaken.
Industrial giant General Electric also helped put traders in a selling mood after its chief financial officer said the company is still bogged down by supply chain problems that were raising costs. GE shares fell 3.7%.
The worrisome corporate updates hit a market already on edge because of stubbornly high inflation as well as the higher interest rates being used to fight it, which will slow the economy. Wall Street is bracing for another hefty interest rate hike from the Federal Reserve next week following a meeting of central bank policymakers.
“Based on this week’s market results there’s no question that investors are going into the weekend, No. 1 very concerned about the U.S. economy looking into the balance of this year and No. 2, with all eyes focused on next week’s Fed action,” said Greg Bassuk, CEO at AXS Investments.
The S&P 500 fell 28.02 points to 3,873.33. It’s now down 18.7% so far this year.
The Dow dropped 139.40 points to 30,822.42 and the Nasdaq slid 103.95 points to 11,448.40. The Russell 2000 gave up 27.04 points to 1,798.19.
The housing sector is also hurting as interest rates rise.
Average long-term U.S. mortgage rates climbed above 6% this week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for homebuyers.