US Stocks Slip Wednesday 08/17 10:10
Stocks are moving broadly lower on Wall Street in morning trading Wednesday,
led by drops in big technology companies and erasing the S&P 500's gains for
NEW YORK (AP) -- Stocks are moving broadly lower on Wall Street in morning
trading Wednesday, led by drops in big technology companies and erasing the S&P
500's gains for the week.
The S&P 500 slipped 0.7% as of 10:26 am. Eastern. Trading has been choppy
throughout the week as the benchmark index comes off a four-week winning streak.
The Dow Jones Industrial Average fell 175 points, or 0.5%, to 33,978 and the
Nasdaq fell 1.2%.
Small-company stocks fell more sharply than the rest of the market. The
Russell 2000 fell 1.5%.
Pricey technology companies and retailers had some of the biggest losses.
Utilities and makers of essential consumer products, which are typically
considered less risky, held up better than the broader market.
Wall Street was absorbing a mix of retail updates that showed inflation
pressure continues to affect businesses and consumers, but also shows that
spending remains strong.
Target fell 2.5% after reporting a nearly 90% plunge in second quarter
profits as it was forced to slash prices to clear unwanted inventories. The
retailer warned earlier this summer that it was canceling orders from suppliers
and aggressively cutting prices because of a pronounced spending shift by
Americans as the pandemic eased.
Children's clothing and accessories chain Children's Place fell 9.6% after
reporting a surprise second-quarter loss as it faced supply chain problems and
pressure from inflation.
Bond yields rose. The yield on the 10-year Treasury rose to 2.88% from 2.81%
Sales at U.S. retailers were unchanged last month, according to the Commerce
Department, and economists had expected a slight increase in July. Part of the
weakness came from a 1.8% drop in gas sales, reflecting lower prices at the
Wall Street has been closely reviewing the latest economic data and
corporate updates to get a better sense of how inflation is affecting
businesses and consumers and whether the hottest inflation in 40 years is
peaking or beginning to cool. Investors are also monitoring inflation to
determine how much further central banks have to go in their fight against
Britain's inflation rate rose to a new 40-year high of 10.1% in July, a
faster pace than in the U.S. and Europe as climbing food prices in the United
Kingdom tightened a cost-of-living squeeze fueled by the soaring cost of
energy. Inflation pressures prompted the Bank of England to boost its key
interest rate by half a percentage point this month, the biggest of six
consecutive increases since December.
The Federal Reserve has been raising interest rates in order to slow the
economy and temper inflation, but investors remain concerned that it could hit
the brakes too hard and send the economy into a recession. The Fed in July
raised its benchmark interest rate by three-quarters of a point for a
second-straight time. Wall Street will get more details on the process behind
that decision when the Fed releases minutes from that meeting later Wednesday.