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U.S. factory orders, job openings fall in February
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Virgin Orbit slumps after filing for bankruptcy
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AMC Entertainment falls after litigation deal
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Indexes down: Dow 0.64%, S&P 0.55%, Nasdaq 0.45%
(Updates prices, adds comments)
By Ankika Biswas and Amruta Khandekar
April 4 (Reuters) - Wall Street's main indexes slipped
on Tuesday as evidence of a cooling economy exacerbated worries
of a recession, with investor bets shifting in favor of a pause
in the Federal Reserve's interest rate hikes in May.
U.S. job openings in February dropped to the lowest level in
nearly two years, suggesting that the labor market was cooling
while factory orders fell for a second straight month.
Stocks were volatile after both the sets of data, which were
in focus to gauge the strength of the economy and for clues on
future interest rate hikes after a recent banking crisis.
Recent data on Monday had also pointed to weakening U.S.
manufacturing activity.
"There is a lot of concern out there already because of the
problems that the banks have experienced and the potential
tightening of credit," said Robert Pavlik, senior portfolio
manager at Dakota Wealth in Fairfield, Connecticut.
"You combine that with weaker economic data and all of a
sudden the Fed is pushed off to the back page and economic data
is brought to the front page."
Sectors closely tied to the economy such as industrials , materials and energy were the top
losers on the S&P 500.
Defensive stocks such as healthcare and utilities , considered to hold up better during an economic
slowdown, were among the few major sectors in the green.
Traders' bets are tilted toward a pause by the Fed in May,
with odds of a 25-basis point rate hike at 39.8%, compared with
nearly 60% before the data, according to CME Group's Fedwatch
tool.
Despite the day's declines, S&P 500 and the tech-heavy
Nasdaq have gained nearly 7% and 16% so far in 2023,
steadying from their worst annual drop last year since the 2008
financial crisis.
At 11:41 a.m. ET, the Dow Jones Industrial Average was down 214.15 points, or 0.64%, at 33,387.00, the S&P 500 was down 22.74 points, or 0.55%, at 4,101.77, and the
Nasdaq Composite was down 55.37 points, or 0.45%, at
12,134.08.
Among stocks, Virgin Orbit Holdings Inc tanked
23.4% after the satellite launch company filed for Chapter 11
bankruptcy on failing to secure long-term funding.
AMC Entertainment Holdings Inc shares tumbled 22.3%
after the movie theater chain said it agreed to settle
litigation and proceed with converting its preferred stock into
common shares.
Shares of Digital World Acquisition Corp fell 7.9%
after the SPAC linked to former U.S. President Donald Trump
delayed the filing of its annual financial report.
Declining issues outnumbered advancers for a 2.82-to-1 ratio
on the NYSE and a 2.51-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and no new low,
while the Nasdaq recorded 53 new highs and 169 new lows.
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru;
Editing by Arun Koyyur and Shounak Dasgupta)
