While you were sleeping: Stocks, bonds fall as market second-guesses the Fed
UPDATED Tech stocks fell for the fourth session in five days.
UPDATED Tech stocks fell for the fourth session in five days.
Wall Street, Treasury bonds and oil prices retreated a day after the US Federal Reserve announced an increase in interest rates as investors second-guessed the central bank's assessment of the outlook for inflation.
"The fact that the Fed is tightening against the backdrop of slowing inflation implies that the market continues to price in policy error," Jabaz Mathai, head of US rates strategy at Citigroup, said in a note, Bloomberg reported.
US Treasuries weakened, pushing yields on the benchmark 10-year note nearly three basis points higher to 2.160% from 2.138% on Wednesday.
Oil prices declined for a second straight session. Shares of energy companies in the S&P 500 lost 0.7%, while US crude for July delivery lost 0.6% to $US44.46 a barrel – its lowest settlement since November.
At the close of trading in New York, the Dow Jones Industrial Average eased 14.66 points, or 0.07%, to 21,359.90. The Nasdaq Composite Index slid 0.5% to 6165.50, its fourth down day in five sessions, while the Standard & Poor's 500 Index shed 0.2% to 2432.46.
The Dow moved lower as declines in shares of Nike and those of Goldman Sachs, down 3.1% and 1.5% respectively, outweighed gains in shares of Caterpillar and those of Boeing, each up 1.6%.
Losing momentum
"You seem to be losing some momentum in the big growth names that have led the market so far this year," Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina, told Reuters.
"At the same time, the economic data has just not been good enough to get investors excited about buying into other areas of the market."
Tech stocks took another hit. Shares of Snap fell as low as $US17, the same price as in its initial public offering in March. It closed 3.6% weaker at $US17.
Shares of Kroger sank 17.5% after the biggest US supermarket operator posted a drop in quarterly same-store sales and downgraded its full-year earnings forecast amid a decline in food prices.
"We expect the pricing environment to get more competitive as value discounters like Aldi expand, players like Lidl enter the market and Wal-Mart flexes its pricing muscle to gain market share," Mickey Chadha, an analyst at Moody's Investor Service, told Bloomberg.
Whole Foods cuts prices
Shares of rival Whole Foods also dropped, trading 6.3% weaker.
"We will not lose on price, CEO Rodney McMullen said in a statement. "We are driving our strategy of lowering costs to reinvest in ways that provide the right value to our customers."
Switzerland's Nestlé said it will explore strategic options for its US confectionery business, including a potential sale. The review is expected to be completed by the end of this year, the company said in a statement.
The review doesn't include Toll House baking products, as that brand remains strategic, Nestlé said.
In Europe, the Stoxx 600 Index ended the day with a 0.4% fall from the previous close. France's CAC40 Index fell 0.5%, while the UK's FTSE 100 Index declined 0.7%. Germany's DAX Index retreated 0.9%.
(BusinessDesk)