Nasdaq drops more than 1% as market stumbles back, Dow closes at two-month low
U.S. stocks fell in choppy trade on Thursday as investors pondered several economic reports that showed a muddy picture of the U.S. economy.
The Nasdaq Composite lost 1.43% to close at 11,552.36, while the S&P 500 fell 1.13% to 3,901.35. The Dow Jones Industrial Average outperformed but still fell 173.27 points, or 0.56%, to 30,961.82 for its lowest close since July 14.
Adobe shares weighed on the Nasdaq and S&P 500. The software stock lost more than 16% after the company announced a $20 billion deal to buy Figma. The weakness spread to other tech stocks, with Apple down 1.9% and Salesforce down 3.4%.
Bank stocks were a bright spot, with Goldman Sachs and JPMorgan rising more than 1% each. UnitedHealth Group grew 2.6%.
Wall Street is still trying to find its footing after a surprise increase in August’s consumer price index sent the Dow down more than 1,200 points on Tuesday. A minor rebound on Wednesday was wiped out by Thursday’s declines.
A mixed batch of economic reports on Thursday did little to boost investor confidence. Initial jobless claims were better than expected, but import prices fell smaller than estimates suggested. Retail sales beat expectations, but were negative excluding autos. Manufacturing data also showed a slowing economy.
While these reports suggest that the US consumer sector is holding up well for now, they will do little to allay concerns about lingering inflation. Investors fear that the Federal Reserve will be more aggressive with its rate hikes to fight inflation, increasing the chances of a recession.
“The Fed has to choose its poison. Do you continue to push hard to control inflation at the risk of recession, at the risk of increasing unemployment? It’s really a dilemma, but I think that given what we we’ve heard from the Fed, the focus is squarely on inflation,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley.
Read the coverage of the mercado de hoy en español here.