New York stocks fell on fears of a recession amid growing concerns from global shipping company FedEx ahead of the Fed’s monetary policy meeting scheduled for next week.
As of 9:48 a.m. on the New York Stock Exchange (NYSE) on the 16th (Eastern time), the Dow Jones Industrial Average recorded 30,652.00, down 309.82 points (1.00%) from the battlefield.
The Standard & Poor’s 500 Index fell 53.23 points (1.36%) to 3,848.12, and the Nasdaq Index, centered on technology stocks, fell 198.51 points (1.72%) to 11,353.85 from the battlefield.
FedEx’s warning further exacerbated investor sentiment as downward pressure on the economy increased due to continued inflation and intense Fed tightening.
FedEx’s first-quarter financial results, which ended in late August, were released the day before, but this fell short of market expectations.
The company withdrew its annual earnings forecast, which it proposed in June, saying that high volatility is making it difficult to forecast earnings.
In addition, considering that the global economy is seriously deteriorating, we decided to take cost-saving measures in response to a decrease in global shipments.
FedEx stock is down more than 20%.
The continued upward trend in government bond yields also has a negative impact on stock prices.
The yield on the two-year Treasury bond broke through 3.9%.
This is the highest level since October 2007.
The unusual pace of rate hikes by the Fed is driving short-term yields steeply.
News from Europe is also negative.
Eurozone’s consumer price index (CPI) rose 9.1% in August compared to the previous year.
This is at the same level as the preliminary level, exceeding the previous month’s 8.9%.
UK retail sales fell 1.6% in August from the previous month, the decline widened from a 0.4% decline in the previous month.
Retail sales in August fell the most since December last year, pushing the pound to its lowest level in 37 years once morest the dollar.
All 11 sectors in the S&P 500 were down, and stocks related to energy, industry, and materials (materials) fell more than 2%.
Shares of competitors UPS and XPO Logistics also fell more than 5% and 7%, respectively, on the news of FedEx’s withdrawal of its annual forecast.
Shares of General Electric (GE) fell more than 4% as it said supply chain issues would continue to affect its earnings.
New York stock market experts said the FedEx news had worsened investor sentiment.
“FedEx has traditionally been a bellwether,” said Robert Titer, director of Silvercrest Asset Management, on CNBC.
He said that FedEx’s case is an important story regarding future corporate profits, but that profit margins will vary from company to company.
“FedEx expects the US economy to enter a recession, which has made traders more cautious,” said Naim Aslam, chief market analyst at Abba Trade.
“Other companies are likely to post similar messages over the next few days,” he said.
“It is true that more and more CEOs are feeling pessimistic regarding the global economy,” Aslam added.
European stocks also fell.
Germany’s DAX index fell 1.78% and the UK FTSE index fell 0.38%.
The pan-European STOXX600 index is down 1.37%.
International oil prices rose slightly.
The October price of West Texas Intermediate (WTI) crude rose 0.07% to $85.12 a barrel, and the November Brent price rose 0.44% to $91.24 a barrel.
/yunhap news
