Off The Wire
Wall Street sell-off deepens, Nasdaq confirms correction
Jan 19 (Reuters) - Wall Street's main indexes fell on Wednesday, with the tech-heavy Nasdaq confirming a correction, after a diverse set of corporate earnings and as investors continued to worry about higher U.S. Treasury yields and the Federal Reserve tightening monetary policy.
The Nasdaq ended down over 10% from its Nov. 19 closing record high. A correction is confirmed when an index closes 10% or more below its record closing level.
Investors digested results from Morgan Stanley (MS.N) and Bank of America (BAC.N) after uneven earnings from other banks, as well as reports from UnitedHealth (UNH.N) and Procter & Gamble (PG.N) as fourth-quarter earnings season picks up.
Stocks have gotten off to a rocky start in 2022, as a fast rise in Treasury yields amid concerns the Federal Reserve will become aggressive in controlling inflation has particularly hit tech and growth shares.
"Any beginning of tightening often results in significant volatility and I think there is always that risk that there is a policy error and it ends the economic cycle," said Kristina Hooper, chief global market strategist at Invesco. "So we just have a lot of apprehension."
According to preliminary data, the S&P 500 (.SPX) lost 44.00 points, or 0.96%, to end at 4,533.11 points, while the Nasdaq Composite (.IXIC) lost 167.55 points, or 1.15%, to 14,339.35. The Dow Jones Industrial Average (.DJI) fell 330.00 points, or 0.93%, to 35,031.71.
Stocks had tumbled on Tuesday, with the Nasdaq falling 2.6%, after weak results from Goldman Sachs and a spike in Treasury yields. U.S. Treasury yields eased on Wednesday from two-year highs.
Investors are looking to next week's Fed policy meeting for more clarity on central bankers' plans to rein in inflation. Data last week showed U.S. consumer prices increased solidly in December, culminating in the largest annual rise in inflation in nearly four decades.
"We have had a bit of a sell-off here and that has been predicated on this concern around the Fed and interest rates," said Keith Lerner, co-chief investment officer at Truist Advisory Services.