Wall Street slips on hawkish Fed; banks, industrials top losers

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 6, 2022. REUTERS/Brendan McDermid

April 7 (Reuters) – The S&P 500 and the Dow slipped on Thursday, with shares of banks, industrials and airlines leading declines on concerns that the Federal Reserve’s aggressive monetary policy might weigh on economic growth.

The blue-chip Dow (.DJI) was the biggest loser among the three major indexes and was dragged down by Goldman Sachs (GS.N), Honeywell International and Boeing (BA.N).

The tech-heavy Nasdaq (.IXIC) steadied after shedding nearly 4.5% over the past two sessions. Market-leading growth stocks have taken a hit this week after comments from Fed policymakers and minutes from the central bank’s March meeting suggested a rapid removal of stimulus measures put in place during the pandemic.

Minutes released on Wednesday showed that Fed officials “generally agreed” to cut up to $95 billion a month from the central bank’s asset holdings even as the war in Ukraine tempered the first U.S. interest rate increase since 2018. read more

“There’s really nothing to support the markets probably between now and the earning season,” said Anastasia Amoroso, chief investment strategist at iCapital.

“The realization for investors continues that the Fed is still not at max hawkishness and we’re going to err on the side of them wanting to do more to continue to control inflation. Against that backdrop, it’s really a struggle for equities to perform.”

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell last week, indicating a further tightening of labor market conditions heading into the second quarter and could contribute to keeping inflation elevated. read more

Most megacap growth shares were mixed in early trading, while Tesla Inc (TSLA.O) rose 1.9% on plans to hold an event to mark the opening of its $1.1 billion factory in Texas. read more

American Airlines Group Inc (AAL.O), Delta Air Lines Inc (DAL.N) and United Airlines Holdings Inc (UAL.O) fell between 2.8% and 4% after Barclays warned of a recent jump in oil prices hurting first-quarter earnings.

U.S. companies will start reporting first-quarter results in the coming weeks, with banks set to kick off the season in earnest next week.

At 10:31 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 217.37 points, or 0.63%, at 34,279.14, the S&P 500 (.SPX) was down 3.61 points, or 0.08%, at 4,477.54, and the Nasdaq Composite (.IXIC) was up 8.19 points, or 0.06%, at 13,897.00.

Adding to the cautious mood, Russian Foreign Minister Sergei Lavrov said Ukraine had presented Moscow with a draft peace deal that contained “unacceptable” elements. read more

HP Inc (HPQ.N) jumped 16.4% after Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) disclosed that it had purchased nearly 121 million shares of the personal computing and printing company. read more

Levi Strauss & Co (LEVI.N) slipped 2.9% even as its quarterly results beat Wall Street estimates. read more

Declining issues outnumbered advancers for a 2.01-to-1 ratio on the NYSE and a 1.58-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 19 new lows, while the Nasdaq recorded 30 new highs and 118 new lows.

Reporting by Bansari Mayur Kamdar and Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila and Anil D’Silva

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