AP

Wall Street falls as FedEx warning adds to market woes

Sep 15, 2022, 10:59 PM | Updated: Sep 17, 2022, 9:27 am

Wall Street closed out the stock market’s worst week in three months with more losses Friday, as a stark warning from FedEx about rapidly worsening trends in the economy rattled already anxious investors.

The S&P 500 fell 0.7%, with all but two of its 11 company sectors ending in the red. The benchmark index sank 4.8% for the week, with much of the loss coming from a 4.3% rout on Tuesday following a surprisingly hot report on inflation. The last time it posted a bigger weekly decline was the week ended June 17.

The Dow Jones Industrial Average fell 0.5% and the Nasdaq composite dropped 0.9%. The Russell 2000 index of smaller companies took the heaviest losses, falling 1.5%.

All the major indexes have now posted losses four out of the past five weeks.

FedEx sank 21.4% for its biggest single-day sell-off on record after warning investors that profits for its fiscal first-quarter will likely fall short of forecasts because of a dropoff in business. The package delivery service is also shuttering storefronts and corporate offices and expects business conditions to further weaken.

Industrial giant General Electric also helped put traders in a selling mood after its chief financial officer said the company is still bogged down by supply chain problems that were raising costs. GE shares fell 3.7%.

The worrisome corporate updates hit a market already on edge because of stubbornly high inflation as well as the higher interest rates being used to fight it, which will slow the economy. Wall Street is bracing for another hefty interest rate hike from the Federal Reserve next week following a meeting of central bank policymakers.

“Based on this week’s market results there’s no question that investors are going into the weekend, No. 1 very concerned about the U.S. economy looking into the balance of this year and No. 2, with all eyes focused on next week’s Fed action,” said Greg Bassuk, CEO at AXS Investments.

The S&P 500 fell 28.02 points to 3,873.33. It’s now down 18.7% so far this year.

The Dow dropped 139.40 points to 30,822.42 and the Nasdaq slid 103.95 points to 11,448.40. The Russell 2000 gave up 27.04 points to 1,798.19.

Technology stocks, banks and energy firms had some of the biggest losses. Adobe fell 3.1%, Bank of America dropped 1.1% and Chevron slid 2.6%.

Makers of household goods, which are typically considered less risky investments, held up better than the rest of the market. Campbell Soup rose 1.3%.

The Federal Reserve is aggressively raising interest rates in an effort to cool the hottest inflation in four decades, but that has raised worries that it could hit the brakes too hard and slide the economy into a recession. The central bank has already raised interest rates four times this year and economists expect another jumbo increase of three-quarters of a point when the Fed’s leaders meet next week.

Higher interest rates tend to weigh on stocks, especially the pricier technology sector. Technology stocks within the S&P 500 are down more than 26% for the year and communications companies have shed more than 34%. They are the worst performing sectors within the benchmark index so far this year.

The housing sector is also hurting as interest rates rise. Average long-term U.S. mortgage rates climbed above 6% this week for the first time since the housing crash of 2008. The higher rates could make an already tight housing market even more expensive for homebuyers.

Reports this week from the government showed that prices for just about everything but gas are still rising, the job market is still red-hot and consumers continue to spend, all of which give ammunition to Fed officials who say the economy can tolerate more rate hikes.

“The market is really looking at data in terms of what the Fed is going to do next year and how far they’ll have to go,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute. “I think they’ll be in a good spot after September, where they’ll have plenty of flexibility to get where they want to be by the end of the year.”

Treasury yields eased a bit Friday after a report showed expectations for inflation among U.S. households are falling to their lowest levels since last year. That’s a positive for markets because the Fed fears a rise in such expectations would make inflation much tougher to fight. But the survey also showed uncertainty remains very high among households about where inflation is heading.

The yield on the 2-year Treasury, which tends to follow expectations for Fed action, fell to 3.85% from 3.92% shortly before the report’s release. The 10-year yield fell to 3.45% from 3.49%.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Lead water pipes pulled from underneath the street are seen in Newark, N.J., Oct. 21, 2021. (AP Pho...

Associated Press

Biden to require cities to replace harmful lead pipes within 10 years

The Biden administration has previously said it wants all of the nation's roughly 9 million lead pipes to be removed, and rapidly.

4 days ago

Facebook's Meta logo sign is seen at the company headquarters in Menlo Park, Calif., on, Oct. 28, 2...

Associated Press

Meta shuts down thousands of fake Facebook accounts that were primed to polarize voters ahead of 2024

Meta said it removed 4789 Facebook accounts in China that targeted the United States before next year’s election.

4 days ago

A demonstrator in Tel Aviv holds a sign calling for a cease-fire in the Hamas-Israel war on Nov. 21...

Associated Press

Hamas releases a third group of hostages as part of truce, and says it will seek to extend the deal

The fragile cease-fire between Israel and Hamas was back on track Sunday as the first American was released under a four-day truce.

8 days ago

Men look over the site of a deadly explosion at Al-Ahli Hospital in Gaza City, Wednesday, Oct. 18, ...

Associated Press

New AP analysis of last month’s deadly Gaza hospital explosion rules out widely cited video

The Associated Press is publishing an updated visual analysis of the deadly Oct. 17 explosion at Gaza's Al-Ahli Hospital.

12 days ago

Peggy Simpson holds a photograph of law enforcement carrying Lee Harvey Oswald's gun through a hall...

Associated Press

JFK assassination remembered 60 years later by surviving witnesses to history, including AP reporter

Peggy Simpson is among the last surviving witnesses who are sharing their stories as the nation marks the 60th anniversary.

12 days ago

Israeli Prime Minister Benjamin Netanyahu, chairs the weekly cabinet meeting in Jerusalem, Sunday, ...

Associated Press

Israeli Cabinet approves cease-fire with Hamas; deal includes release of 50 hostages

Israel’s Cabinet on Wednesday approved a cease-fire deal with the Hamas militant group that would bring a temporary halt to a devastating war.

13 days ago

Sponsored Articles

Follow @KTAR923...

Valley residents should be mindful of plumbing ahead of holidays

With Halloween in the rear-view and more holidays coming up, Day & Night recommends that Valley residents prepare accordingly.

Follow @KTAR923...

West Hunsaker at Morris Hall supports Make-A-Wish Foundation in Arizona

KTAR's Community Spotlight this month focuses on Morris Hall and its commitment to supporting the Make-A-Wish Foundation in Arizona.

...

SCHWARTZ LASER EYE CENTER

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.

Wall Street falls as FedEx warning adds to market woes