Economic Worries Contributing To Continued Weakness On Wall Street
After ending the previous session sharply lower, stocks are seeing further downside in morning trading on Friday. The major averages have all come under pressure after briefly climbing into positive territory.
In recent trading, the major averages have fallen to new lows for the session. The Dow is down 279.35 points or 0.9 percent at 30,496.08, the Nasdaq is down 102.93 points or 0.9 percent at 10,925.80 and the S&P 500 is down 32.58 points or 0.9 percent at 3,752.80.
Concerns about the possibility of tighter monetary policy triggering a global recession continue to weigh on the markets.
Central banks from around the world have signaled their intent to continue to raising interest rates in an effort to fight inflation while acknowledging they can’t guarantee a “soft landing” for the economy.
Stocks came under pressure following the release of a report from the Institute for Supply Management showing the pace of growth in U.S. manufacturing activity slowed by more than expected in the month of June.
The ISM said its manufacturing PMI slid to 53.0 in June from 56.1 in May, although a reading above 50 still indicates growth in the sector. Economists had expected the index to dip to 54.9.
With the bigger than expected decrease, the manufacturing PMI slumped to its lowest level since hitting 52.4 in June of 2020.
A separate report from the Commerce Department showed U.S. construction spending unexpectedly edged lower in the month of May.
Semiconductor stocks have helped to lead the markets lower in morning trading, with the Philadelphia Semiconductor Index plunging by 4.4 percent to its lowest intraday level in well over a year.
Micron Technology (MU) is posting a steep loss after the chipmaker reported better than expected fiscal third quarter earnings but provided disappointing revenue guidance.
Substantial weakness has also emerged among oil service stocks, as reflected by the 4.1 percent nosedive by the Philadelphia Oil Service Index. The sell-off comes despite a rebound by the price of crude oil.
Steel stocks have also come under pressure over the course of the morning, dragging the NYSE Arca Steel Index down by 3.4 percent to a one-year intraday low.
Computer hardware, networking and chemical stocks are also seeing considerable weakness, while interest rate-sensitive housing, utilities and commercial real estate stocks have moved to the upside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index dove by 1.7 percent, while China’s Shanghai Composite Index dipped by 0.3 percent.
Meanwhile, the major European markets are turning in a lackluster performance on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the French CAC 40 Index and the German DAX Index is up by 0.1 percent.
In the bond market, treasuries are showing another strong move to the upside. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down 16.1 basis points at 2.811 percent, falling to its lowest intraday level in a month.
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