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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
(Updates with details at close of trading)
By Noel Randewich and Ankika Biswas
April 4 (Reuters) - Wall Street dropped on Tuesday after
evidence of a cooling economy exacerbated worries that the
Federal Reserve's campaign to rein in decades-high inflation may
cause a deep downturn.
The S&P 500 closed lower for the first time in a week as
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.
According to preliminary data, the S&P 500 lost 23.87 points, or 0.58%, to end at 4,100.64 points, while the Nasdaq Composite lost 63.13 points, or 0.52%, to 12,126.39. The Dow Jones Industrial Average fell 196.83 points, or 0.59%, to 33,404.32. Caterpillar Inc , viewed as bellwether for the industrial sector, fell sharply. 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 for much of the session 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.
So far in 2023, the S&P 500 has gained about 7% and it remains down about 15% from its record high close in January 2022.
Virgin Orbit Holdings Inc slumped after the
satellite launch company filed for Chapter 11 bankruptcy on
failing to secure long-term funding.
AMC Entertainment Holdings Inc shares tumbled as
much as 24% 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 after
the SPAC linked to former U.S. President Donald Trump delayed
the filing of its annual financial report.
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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)
