Shares fall after three-week sell-off


US stocks fell lower Tuesday as traders returned to Wall Street for a shortened holiday week after Labor Day.

The benchmark S&P 500 fell 0.7%, while the Dow Jones Industrial Average fell by the same margin, or about 230 points. The tech-heavy Nasdaq Composite suffered losses, slipping more than 1%. The moves come after three consecutive weeks of losses to the big averages.

“The market will enter the first full week of September looking for a three-week loss streak as investors continued to digest the Fed’s inflation-fighting message ‘we will not be sidetracked’,” Chris Larkin, trading director at Morgan Stanley’s E * TRADE said in a note Tuesday.

“Bulls hoping for a rebound will do so during a shortened Labor Day week that historically paralleled September and its track record of underperformance: The past three decades saw slightly less frequent losses, but volatility was higher.”

Treasuries ticked higher as investors await the Federal Reserve’s next policy move later this month. The 10-year benchmark rose to 3.269%, while the 2-year Treasury rose to 3.449%.

Oil prices fell after a temporary rally on the heels of OPEC+’s first supply cut in more than a year, as the group works to manage global crude markets. West Texas Intermediate crude fell 0.5% to $86.44 a barrel, while Brent futures fell 0.2% to $92.81.

In cryptocurrency markets, Bitcoin (BTC USD) fell below the $20,000 level again.

Shares of Bed Bath & Beyond (BBBY) fell 18% at the start of the session on Tuesday morning. Last week, the homewares retailer announced in a strategic update that it would lay off staff and close about 150 stores as part of a turnaround for its struggling business.

Reports surfaced this weekend that the company’s chief financial officer, Gustavo Arnal died by suicide Friday afternoon after falling from a skyscraper in New York’s Tribeca neighborhood, known as the “Jenga” Tower. Prior to his death, Arnal was named in a $1.2 billion shareholder lawsuit for involvement in a “pump and dump” scheme.

A shopping cart is seen outside a Bed Bath & Beyond store in Manhattan, New York City, US, June 29, 2022. REUTERS/Andrew Kelly
A shopping cart is seen in a Bed Bath & Beyond store in Manhattan, New York City, US, June 29, 2022. REUTERS/Andrew Kelly

“The company is in the early stages of reviewing the complaint, but based on current knowledge, the company believes the claims are unfounded,” said a company spokesperson. Bed Bath & Beyond told Yahoo Finance.Digital World Acquisition (DWAC) shares fell more than 17% after the special-purpose acquisition company that would merge with former President Donald Trump’s social media platform failed to gain enough shareholder support to extend the deadline to complete the deal.

Tuesday’s moves come after the Labor Department released its latest monthly jobs report for August on Friday. The US economy was the last to add 315,000 jobs, while the unemployment rate rose to 3.7%, according to government data.

“The modest slowdown in employment growth in August may be welcome by the Fed, but it will not prevent further significant rate hikes in the coming months,” Nancy Vanden Houten and Kathy Bostjancic of Oxford Economics said in a note on Friday. “Fed Chairman Powell made it clear last week that the FOMC plans to push rates far into restrictive territory to curb inflation and avoid loosening inflation expectations.”

Bank of America strategists led by Michael Hartnett warned Friday of a “rapid inflation shock” and “slow recessionary shock,” with investors anticipating continued monetary tightening by the Federal Reserve.

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