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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: S&P 500 -0.56%, Nasdaq -0.47%, Dow -0.65%
(Updates with details of trading at mid-day, adds investor
comment)
By Noel Randewich and Ankika Biswas
April 4 (Reuters) -
Wall Street fell on Tuesday as evidence of a cooling economy exacerbated worries that the Federal Reserve's campaign to rein in decades-high inflation may cause a deep downturn.
All three major stock indexes were lower at mid-day after data showed 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.
Data on Monday had also pointed to weakening U.S. manufacturing activity.
"The number of job openings has decreased, which makes
people worry that hiring is going too slow, and that will be bad
for the economy. That feeds into recessionary fears," said Sal
Bruno, Chief Investment Officer at IndexIQ in New York.
Bank stocks took a hit after JPMorgan Chase & Co CEO Jaime Dimon
warned
in a letter to shareholders that the U.S. banking crisis is
ongoing and that its impact will be felt for years.
Bank of America and Wells Fargo & Co dropped more than 2%, and the S&P 500 banks index fell 2.3%.
Of the 11 S&P 500 sector indexes, seven declined, led lower by industrials , down 2.01%, followed by a 1.57% loss in energy .
Caterpillar Inc , viewed as bellwether for the industrial sector, tumbled 5.1%.
Healthcare and utilities , which many investors expect to hold up better during an economic slowdown, were among the few S&P 500 sector indexes gaining on Tuesday.
Trading in interest rate futures shows bets are now tilted toward a pause by the Fed in May, with odds of a 25-basis point rate hike at 42%, compared with nearly 60% before the data, according to CME Group's Fedwatch tool. In afternoon trading, the S&P 500 was down 0.56% at 4,101.58 points.
The Nasdaq declined 0.47% to 12,131.64 points, while the Dow Jones Industrial Average was down 0.65% at 33,383.70 points.
The S&P 500 and the tech-heavy Nasdaq have gained nearly 7% and 16%, respectively, so far in 2023.
Virgin Orbit Holdings Inc slumped almost 26% after the satellite launch company filed for Chapter 11 bankruptcy on failing to secure long-term funding. AMC Entertainment Holdings Inc shares tumbled about 23% 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 5.3% after the SPAC linked to former U.S. President Donald Trump delayed the filing of its annual financial report.
Declining stocks outnumbered rising ones within the S&P 500 by a 3.5-to-one ratio.
The S&P 500 posted 12 new highs and no new lows; the
Nasdaq recorded 56 new highs and 204 new lows.
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Odds point to no May rate hike S&P 500's busiest trades ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Ankika Biswas and Amruta Khandekar in Bengaluru
and by Noel Randewich in Oakland, Calif.; Editing by Arun
Koyyur, Shounak Dasgupta and Deepa Babington)
