US stocks on Friday fell in a broad sell-off led by megacaps as US bond yields rose, with the S&P 500 posting losses for the week after four straight weeks of gains.
Amazon.com Inc, Apple Inc and Microsoft Corp all fell and were the biggest drags on the S&P 500 and NASDAQ. Higher rates tend to be a negative for technology and growth stocks, the valuations of which rely more heavily on future cash flows.
US Treasury yields rose, with the benchmark 10-year note nearly hitting 3 percent, after Germany reported record-high increases in monthly producer prices.
Investors have been weighing how aggressive the US Federal Reserve might need to be as it raises interest rates to battle inflation.
Federal Reserve Bank of Richmond President Thomas Barkin said on Friday that US central bank officials have “a lot of time still” before they need to decide how large an interest rate increase to approve at their Sept. 20-21 policy meeting.
“The rise in rates around the globe and tough talk from central bankers are being used as an excuse to push stocks lower in very light volume on an August Friday session,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Photo: AFP
The Dow Jones Industrial Average fell 292.3 points, or 0.86 percent, to 33,706.74; the S&P 500 lost 55.26 points, or 1.29 percent, to 4,228.48; and the NASDAQ Composite dropped 260.13 points, or 2.01 percent, to 12,705.22.
All three major indices registered losses for the week. The S&P 500 fell about 1.21 percent and the NASDAQ slid 2.62 percent in their first weekly declines after four weeks of gains. The Dow lost 0.16 percent for the week.
After notching its worst first half since 1970, the S&P 500 has bounced about 16 percent from its mid-June low, fueled by stronger-than-expected corporate earnings and hopes the economy can avoid a recession even as the Fed hikes rates.
Friday’s monthly options expiration should also make way for greater near-term stock market moves as options positions expire, said Brent Kochuba, founder of options-focused financial insights company SpotGamma.
The US central bank needs to keep raising borrowing costs to tame decades-high inflation, a string of US central bank officials said on Thursday, even as they debated how fast and how high to lift them.
The Fed has raised its benchmark overnight interest rate by 225 basis points since March to fight inflation at a four decade-high.
Focus this week might be on Fed Chairman Jerome Powell’s speech on the economic outlook at the annual global central bankers’ conference in Jackson Hole, Wyoming.
“Meme stock” Bed Bath & Beyond Inc plunged 40.5 percent as billionaire investor Ryan Cohen exited the struggling home goods retailer by selling his stake.
Shares of Deere & Co ended slightly higher, even after it lowered its full-year profit outlook and said it has sold out of large tractors as it grapples with parts shortages and high costs.
Volume on US exchanges was last at 10.01 billion shares in one of the lowest volume days of the year.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 6.06-to-1 ratio; on NASDAQ, a 3.59-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 29 new lows; the NASDAQ Composite recorded 43 new highs and 93 new lows.
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
China is clamping down on fertilizer exports to protect its domestic market, industry sources said, putting an additional strain on global markets that were already grappling with shortages caused by the US-Israeli war on Iran. China is among the largest fertilizer exporters — shipping more than US$13 billion of it last year — and it has a history of controlling exports to keep prices low for farmers. Shipments through the war-blocked Strait of Hormuz account for about one-third of the sea-borne supply. This month, Beijing banned exports of nitrogen-potassium fertilizer blends and certain phosphate varieties, sources said. The ban, which has not
AMAZING ABUNDANCE: Elon Musk has announced plans for a new facility in Texas which would manufacture chips for Tesla and SpaceX to use in robotics and AI Elon Musk said his Terafab project — a grand plan to eventually manufacture his own chips for robotics, artificial intelligence (AI) and space data centers — would be built in Austin and jointly run by Tesla Inc and Space Exploration Technologies Corp (SpaceX). Musk, the chief executive officer of the two companies, said he would start off with an “advanced technology fab” in Austin that would have all of the equipment necessary to make chips of any kind. The project would call for one day supporting 1 terawatt (TW) of computing power per year, the amount Musk expects the companies to
RSS