Wall Street Ends Lower, Battered By Economic Data

Wall Street ended sharply lower on Thursday, extending its losses in late afternoon trading as a raft of economic data failed to alter the expected course of aggressive tightening by the Federal Reserve amid growing warnings of global recession.

The sell-off gathered momentum toward the end of the session, with market leaders including Microsoft, Apple and Amazon hitting the tech-laden Nasdaq hardest.

The benchmark S&P 500 closed a hair above 3,900, seen by many analysts as a key technical support level that has been tested several times over the past two weeks. Interest rate-sensitive banks helped soften the blue-chip Dow's decline.

The Dow Jones fell 0.56 percent to 30,961, the S&P 500 lost 1.13 percent to 3,901, and the Nasdaq dropped 1.43 percent to 11,552.

The scales tipped further to the bear side after the World Bank and the International Monetary Fund (IMF) warned of an impending global economic slowdown.

A mixed bag of economic data, led by better-than-expected retail sales, cemented the likelihood of another 75 basis-point interest rate hike from the Fed at the conclusion of next week's monetary policy meeting, as uncertainties simmered over where the central bank will go from there.

"The question is what’s going to happen in November?" said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "If the Fed really wants to handle it properly, it will be 50 basis-point drop in November, a 25 basis-point cut in December, and then they'll reassess."

While the retail print surprised to the upside, declining jobless claims reaffirmed the labor market's strength, and a drop in import prices supported the past-peak inflation narrative.

But a surprise drop in industrial production and a contraction of Atlantic region manufacturing provided fodder for economic pessimists.

Shares of railroad operators Union Pacific and Norfolk Southern outperformed the broader market after the Biden administration helped broker a tentative deal with unions to avert a strike, thereby avoiding a rail shutdown which would add to supply-chain pressures at the core of hot inflation.

Adobe Inc was the S&P 500's biggest percentage loser, tumbling 16.8 percent after the company said it would buy Figma in a cash-and-stock deal that valued the online design startup at about $20 billion. (Reuters)