U.S. Stocks Showing Another Significant Move To The Downside

After moving sharply lower over the two previous sessions, stocks have shown another significant move to the downside in morning trading on Friday. With the extended sell-off, the major averages have fallen to their worst intraday levels in a month.

Currently, the major averages are just off their lows of the session. The Dow is down 388.64 points or 1.2 percent at 32,813.58, the Nasdaq is down 121.34 points or 1.1 percent at 10,689.19 and the S&P 500 is down 52.09 points or 1.3 percent at 3,843.66.

The continued weakness on Wall Street comes amid ongoing concerns about the outlook for interest rates and the economy.

The Fed’s hawkish tone in Wednesday’s monetary policy announcement has added to worries about the central bank’s aggressive rate hikes tipping the economy into a recession.

While inflation has recently shown signs of slowing, the Fed signaled it plans to continue raising interest rates next year.

A recent batch of disappointing economic data has led to fears the Fed’s fight against inflation is already taking its toll on the economy.

Next week, the Commerce Department is due to release its report on personal income and spending, which includes a reading on inflation said to be preferred by the Fed.

With Fed Chair Jerome Powell saying the central bank will require “substantially more evidence” inflation is on a sustained downward trend before halting its rate hikes, traders are likely to keep a close eye on the inflation reading.

Interest rate-sensitive commercial real estate stocks have moved sharply lower in morning trading, dragging the Dow Jones U.S. Real Estate Index down by 3.0 percent to its lowest intraday level in over a month.

Substantial weakness is also visible among natural gas stocks, as reflected by the 2.8 percent plunge by the NYSE Arca Natural Gas Index.

The weakness in the natural gas sector comes amid a steep drop by the price of the commodity, with natural gas for January delivery plummeting $0.442 or 6.3 percent to $6,528 per million BTUs.

Utilities, oil, telecom and airline stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

In overseas trading stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index tumbled by 1.9 percent, while Australia’s S&P/ASX 200 Index slid by 0.8 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index has slumped by 1.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are down by 1.5 percent and 1.5 percent, respectively.

In the bond market, treasuries are giving back ground after ending the previous session firmly positive. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 6.5 basis points at 3.515 percent.

Source: Read Full Article