US STOCKS-Wall Street falls fourth straight day as recession worries nag

Aerojet Rocketdyne Holdings

19/12/2022 21:00

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 (Updates to close, adds commentary)
    By Sinéad Carew and Sruthi Shankar
       Dec 19 (Reuters) - Wall Street equities closed lower on
Monday for a fourth straight session with Nasdaq leading
declines as investors shied away from riskier bets, worried the
Federal Reserve's tightening campaign could push the U.S.
economy into a recession.
    The three major U.S. stock indexes have been pressured since
Wednesday, when Fed Chair Jerome Powell took a hawkish tone when
the central bank raised interest rates. Powell promised further
increases even as weak data showed signs of a weakening economy.
  
    The S&P 500  .SPX , the Dow Jones industrials  .DJI  and the
Nasdaq have sold off sharply for December and are on track for  
their biggest annual declines since the 2008 financial crisis.
    U.S. Treasury yields gained as investors girded for a
potential recession in 2023, forsaking stocks for safer options,
according to Brian Overby, senior markets strategist at Ally. 
        "Investors are asking why do I want to take those risks
going into 2023 with the Fed's stance still aggressive when I
can get such a good yield on the fixed income market place,"
said Overby. 
  
        The lack of big earnings reports or economic data on
Monday sharpened investors' focus on economic fears and interest
rates, according to Melissa Brown, Global Head of Applied
Research at Qontigo in New York.  
  
        "It's a knife edge between whether we're going to teeter
into a recession or have a soft landing. Is the Fed acting
appropriately?" said Brown who also noted that moves may be
exaggerated as many investors take vacation around the
end-of-year holidays.
    "Investors have not necessarily changed their view in
aggregate but those who have are driving the market right now
and driving bigger changes in stock prices because of low
trading volume," she said.
    According to preliminary data, the S&P 500  .SPX  lost 35.20
points, or 0.91%, to end at 3,817.16 points, while the Nasdaq
Composite  .IXIC  lost 156.66 points, or 1.46%, to 10,548.75.
The Dow Jones Industrial Average  .DJI  fell 161.48 points, or
0.49%, to 32,758.98.   
    Big sector decliners included communications services
 .SPLRCL , technology  .SPLRCT  and consumer discretionary
 .SPLRCD  while energy  .SPNY  outperformed.       
        Market heavyweights such as Apple Inc  AAPL.O ,
Microsoft Corp  MSFT.O  and Amazon.com Inc  AMZN.O  created some
of the biggest drags on the market.  
  
    Trading in Tesla Inc  TSLA.O  was volatile with the electric
carmaker falling as much as 2.8% during the session following a
Twitter poll that showed a majority of respondents want Tesla
Chief Executive Elon Musk to step down as CEO of the social
media platform.
    Meta Platforms  META.O  shares fell after the European
Commission said it could impose a fine of up to 10% of the tech
conglomerate's annual global turnover if evidence showed an
infringement of the EU's antitrust laws.
    L3Harris Technologies Inc  LHX.N  lost ground after the U.S.
defense contractor said it would buy hypersonic engine
manufacturer Aerojet Rocketdyne Holdings Inc  AJRD.N  for $4.7
billion. Aerojet gained ground.
    Shares of casino operators Melco Resorts & Entertainment
 MLCO.O , Las Vegas Sands Corp  LVS.N  and Wynn Resorts  WYNN.O 
fell after Macau said on Friday that six casino firms will
invest around $15 billion as part of new 10-year contracts they
signed to operate in the world's biggest gambling hub. 
 (Reporting by Sinéad Carew, Sruthi Shankar, Shubham  Batra,
Johann M Cherian and Sruthi Shankar in Bengaluru; Editing by
Saumyadeb Chakrabarty, Maju Samuel and David Gregorio)
 ((sinead.carew@thomsonreuters.com))