NEW YORK CITY, RAW – US stocks have fallen, with the tech-heavy Nasdaq leading losses after stronger-than-expected retail sales data gave the Federal Reserve more ammunition to tighten policy, while geopolitical tensions over Russia and Ukraine added to caution.
Eight of the 11 major S&P sectors fell, with technology and communication services leading the declines. The energy index jumped two per cent, tracking crude prices.
Shares of ViacomCBS tumbled 20.3 per cent after the media conglomerate missed profit forecasts, while announcing a change in its name to Paramount and unveiling a broad range of programming.
Data showed retail sales rose 3.8 per cent in January, rebounding sharply from the previous month, led by a surge in purchases of motor vehicles and other goods. Economists had forecast a rise of two per cent.
The numbers come ahead of minutes from the Fed’s meeting, due within hours, with investors looking for more clues on the central bank’s plans to trim its massive balance sheet and hike interest rates.
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“If the consumer can absorb, continue to spend and thrive throughout this inflationary period, that gives the Federal Reserve more leeway to be aggressive in its monetary policy,” said Keith Buchanan, portfolio manager at Globalt Investments in Atlanta.
Keeping geopolitical tensions high, US Secretary of State Antony Blinken said Russia has been moving critical units closer to Ukraine’s border and that the United States has so far not seen any pullback of Moscow’s forces in the area.
Comments from Moscow saying more of its forces surrounding Ukraine were withdrawing had spurred a rally in risky assets on Tuesday. The Nasdaq had surged 2.5 per cent on Tuesday, while the S&P 500 and the Dow Jones each ended more than one per cent higher.
In early trading on Wednesday, the Dow Jones Industrial Average was down 192.81 points, or 0.55 per cent, at 34,796.03, the S&P 500 was down 32.34 points, or 0.72 per cent, at 4,438.73, and the Nasdaq Composite was down 179.72 points, or 1.27 per cent, at 13,960.03.
Shares of big banks fell, with Goldman Sachs down 1.3 per cent, while those of major growth names Apple Inc, Google-owner Alphabet Inc, Amazon.com Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc dropped between 0.8 per cent and 2.7 per cent after rallying strongly on Tuesday.
Waning benefits from stay-at-home demand saw Canadian e-commerce firm Shopify slump 16.8 per cent after it forecast a slowing pace in first-half revenue growth, while Roblox Corp tumbled 24.0 per cent after the gaming platform missed analysts’ expectations for quarterly bookings.
Airbnb, meanwhile, rose 2.7 per cent after the short-term home rental company forecast better-than-expected first-quarter revenue on strong travel demand and longer stays.
Devon Energy Corp rose five per cent after the oil producer reported fourth-quarter results above Wall Street estimates.
Declining issues outnumbered advancers for a 1.21-to-1 ratio on the NYSE and 2.08-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and three new lows, while the Nasdaq recorded 27 new highs and 42 new lows.