US STOCKS-Wall St slides after manufacturing data, Salesforce tumbles

Follow us on Google News:
 US STOCKS-Wall St slides after manufacturing data, Salesforce tumbles
Image source: ©2022 Kalkine Media®

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window)


Salesforce slides on co-CEO exit plans


Dollar General falls on slashing annual profit view


U.S. manufacturing shrinks for first time in 2-1/2 years in Nov


Indexes down: Dow 1.27%, S&P 0.64%, Nasdaq 0.61%

(Updates prices to open, adds comments, details)

By Ankika Biswas and Shreyashi Sanyal

Dec 1 (Reuters) - Wall Street gave up gains made earlier on Thursday as a contraction in manufacturing activity last month clouded data showing a mild easing in inflation and solid consumer spending, while a fall in Salesforce shares dragged the Dow lower.

U.S. manufacturing activity shrank for the first time in 2-1/2 years in November as higher borrowing costs weighed on demand for goods, and proved to be a trigger for investors to book profits following a rally in the previous session.

"Yesterday's move was so crazy large, this is probably just some natural profit taking," Rusty Vanneman, chief investment strategist at Orion Advisor Solutions, said.

Federal Reserve Chair Jerome Powell said on Wednesday it was time to slow down coming interest rate hikes, while also signaling a protracted economic adjustment amid high borrowing costs, pushing the S&P 500 index above its 200-day moving average for the first time since April.

Markets were boosted earlier in the day by a reading from the Commerce Department, which showed consumer spending, that accounts for more than two-thirds of U.S. economic activity, rose 0.8% after an unrevised 0.6% increase in September.

The core personal consumption expenditure (PCE) index, excluding volatile items, eased to 0.2%, against expectations of 0.3%.

"Obviously the (manufacturing) sector is in recession and this basically upholds the fact that we're headed for a recession," said Peter Cardillo, chief market economist at Spartan Capital Securities.

Traders still see an 89% chance that the Fed will increase its key benchmark rate by 50 basis points in December, with the terminal rate expected to be under 5% in May 2023.

Weighing the most on the Dow Jones Industrial Average was Salesforce Inc, which tumbled 10.8% after the software maker said Bret Taylor would step down as co-chief executive officer in January.

Dollar General Corp fell 9.3% after the discount retailer cut its annual profit forecast, while Costco Wholesale Corp shed 7.0% after the membership-only retail chain reported slower sales growth in November.

Investors now await nonfarm payrolls data on Friday, with the ADP report on Wednesday suggesting cooling demand for labor.

Separately, a report from the Labor Department on Thursday showed initial claims for state unemployment benefits dropped 16,000 to a seasonally adjusted 225,000 for the week ended Nov. 26.

At 10:33 a.m. ET, the Dow Jones Industrial Average was down 439.25 points, or 1.27%, at 34,150.52, the S&P 500 was down 26.13 points, or 0.64%, at 4,053.98, and the Nasdaq Composite was down 69.40 points, or 0.61%, at 11,398.60.

Most megacap growth stocks such as Alphabet Inc, Apple Inc, Microsoft Corp and Tesla Inc fell between 0.3% and 1.5% as Treasury yields edged higher following an initial dip.

Advancing issues outnumbered decliners for a 1.23-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.14-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and no new low, while the Nasdaq recorded 68 new highs and 37 new lows. (Reporting by Ankika Biswas and Shreyashi Sanyal in Bengaluru; Additional reporting by Bansari Mayur Kamdar and Shubham Batra; Editing by Shounak Dasgupta)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Featured Articles