Wall Street slips, FedEx warning, market woes
Newslooks- (AP)
Stocks fell broadly in morning trading on Wall Street Friday, putting the market on track for another week of sizable losses.
The latest discouraging news for traders came from corporate giants FedeEx and General Electric, which warned about worsening trends in the economy hurting business.
The S&P 500 fell 1.1% as of 10:12 a.m. Eastern. The benchmark index is down 5% for the week, with much of the loss coming from a rout on Tuesday following a surprisingly hot report on inflation.
The Dow Jones Industrial Average fell 240 points, or 0.8%, to 30,721 and the Nasdaq fell 1.4%. Both indexes are also on track for steep weekly losses.
Technology stocks, retailers and industrial companies had some of the biggest losses.
Package delivery service FedeEx fell 21.2% after warning investors that profits for its fiscal first-quarter will likely fall short of forecasts because of a dropoff in business. It is also shuttering storefronts and corporate offices and expects business conditions to further weaken.
Industrial giant General Electric fell 3.8% after its chief financial officer said it was still bogged down by supply chain problems that were raising costs.
Utilities and makers of household goods, which are typically considered less risky investments, held up better than the rest of the market.
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.
The Federal Reserve is aggressively raising interest rates in an effort to cool the hottest inflation in four decades, but that has raised worries that it could hit the brakes too hard and slide the economy into a recession. The central bank has already raised interest rates four times this year and economists expect another jumbo increase of three-quarters of a point when the Fed’s leaders meet next week.
The rate hikes have seemingly done little to cool inflation. Reports this week from the government showed that prices for just about everything but gas are still rising, the job market is still red-hot and consumers continue to spend, all of which give ammunition to Fed officials who say the economy can tolerate more rate hikes.
Bond yields rose. The yield on the two-year Treasury, which tends to track actions by the Fed, rose to 3.90% from 3.86% late Wednesday. The yield on the 10-year Treasury, which helps dictate where mortgages and rates for other loans are heading, rose to 3.46% from 3.45% late Wednesday.
