US STOCKS-Wall St sinks on Powell rate-cut caution, Trump cabinet picks

Monster Beverage

15/11/2024 21:50

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      Retail sales rise 0.4% in October, above forecasts
    

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      Indexes on track for weekly losses
    

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      Vaccine makers, packaged food cos fall after RFK Jr.
appointment
    

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      Applied Materials down after Q1 rev forecast misses
estimates
    

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      Indexes down: Dow 0.70%, S&P 500 1.32%, Nasdaq 2.24%
    

  
 (Updated with final prices, volume data)
    By Sinéad Carew and Lisa Pauline Mattackal
       Nov 15 (Reuters) - Wall Street's main indexes closed
lower on Friday, with the S&P 500 and Nasdaq notching their
biggest one-day losses in two weeks, on concerns about slower
interest-rate cuts and as investors reacted to cabinet picks by
U.S. President-elect Donald Trump.
    Federal Reserve Chair Jerome Powell on Thursday cited
ongoing economic growth, a solid job market, and inflation above
the U.S. central bank's 2% target as reasons it can afford to be
careful with the pace and scope of future rate cuts.
    Traders increased bets the Fed will not change rates at its
December meeting, pricing in a roughly 42% chance, versus
roughly 14% a month ago, according to the CME FedWatch tool.
They also dialed back expectations for easing in 2025.
    This view was reinforced by Friday's economic data showing
U.S. retail sales rose slightly more than expected in October.
Import prices also rebounded and data released on Wednesday and
Thursday showed sticky inflation.
   
    "In the last 48 hours we've had some pretty big changes, not
just from the election but from economic data that was better
than expected and Powell speaking about not having to be as
aggressive on interest rate cuts," said Adam Rich, deputy chief
investment officer for Vaughan Nelson in Houston.
    "Market expectations for interest rate cuts have come down
materially and also the market is readjusting after a pretty
bullish reaction to the U.S. election."
    Friday's sell-off ended a week in which market focus shifted
from the U.S. election win by Trump, seen as a pro-business
choice, to worries about the rate cut path and potential
inflation risks under the next administration.
    For the week, the S&P 500 fell 2.08% while the Nasdaq
declined 3.15%, marking their biggest weekly losses in more than
two months. The Dow fell 1.24% for the week.
    "Volumes are elevated today. People are taking profits
because this has been a good month. U.S. stocks have been doing
well this month. But it's not blanket profit taking," said John
Augustine, chief investment officer at Huntington National Bank,
pointing to gains in the Utilities sector  .SPLRCU . "This
suggests more of a rotation."
        Stocks of vaccine makers and packaged food companies
also dipped after Trump said he would nominate Robert F Kennedy
Jr, who has spread misinformation on vaccines and criticized
ultra-processed foods, to head the Department of Health and
Human Services. 
    The Dow Jones Industrial Average  .DJI  fell 305.87 points,
or 0.70%, to 43,444.99, the S&P 500  .SPX  lost 78.55 points, or
1.32%, to 5,870.62 and the Nasdaq Composite  .IXIC  dropped
427.53 points, or 2.24%, to 18,680.12.
    The small-cap Russell 2000 index  .RUT  ended down 1.4%, its
fourth consecutive session of losses. 
    Shares of defense firms and government contractors also
fell, partly on concerns about Trump's picks earlier this week
to head a new Department of Government Efficiency.
    Among the S&P 500's 11 major industry sectors information
technology  .SPLRCT  was the day's biggest loser, dropping 2.5%.
    Also, the Philadelphia SE Semiconductor index  .SOX  fell
3.4% with Applied Materials  AMAT.O  tumbling 9.2% after the
U.S. maker of chip-manufacturing equipment forecast
first-quarter revenue below Wall Street estimates. 
    Shares in Moderna  MRNA.O  dropped 7.3% and Pfizer  PFE.N 
fell 4.7%, weighing on healthcare  .SPXHC , which closed down
1.88% after hitting its lowest since May in its fifth straight
day of declines.
    The Consumer staples index  .SPLRCS , which finished off
0.8%, was also hurt by the nomination news. Among its biggest
decliners, Monster Beverage  MNST.O  fell 7%, Lamb Weston  LW.N 
lost 6% and Keurig Dr Pepper  KDP.O  dropped 5% to its lowest
level since April.
    Adding to Friday's volatility was the regular expiration of
stock and index options, according to Vaughan Nelson's Rich. 
    Brent Kochuba, founder of financial insights company
SpotGamma, said Friday's stock market weakness was partly due to
investors being ill-prepared for a pullback.
    CBOE's volatility index  .VIX , also known as Wall Street's
fear gauge, hit 17.55 earlier on Friday, the highest since
Election Day on Nov. 5. However the index pared gains to close
at 16.14.
    Declining issues outnumbered advancers by a 1.89-to-1 ratio
on the NYSE where there were 117 new highs and 108 new lows.
    On the Nasdaq, 1,241 stocks rose and 3,115 fell as declining
issues outnumbered advancers by a 2.51-to-1 ratio. The S&P 500
posted 13 new 52-week highs and 25 new lows while the Nasdaq
Composite recorded 36 new highs and 285 new lows. 
    On U.S. exchanges 15.47 billion shares changed hands
compared with the 13.94 billion average for the last 20
sessions.

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Monthly change in US retail sales    https://reut.rs/4i10zGa
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 (Reporting by Sinéad Carew, Saqib Iqbal Ahmed in New York, Lisa
Mattackal and Purvi Agarwal in Bengaluru; Editing by Devika
Syamnath and Richard Chang)
 ((sinead.carew@thomsonreuters.com; +13322191897))