Wall Street ends lower as investors gauge Fed's policy path

In a seesaw session, the indexes were up for most of the afternoon, the Dow up over 200 points before 2 pm before everything went south losing 400 points by close, most of that in the last 20 minutes. The tech-heavy Nasdaq was a bit different with losses all day until 2 pm when it briefly broke even then started another decline, again most of it in the last half hour.  The up and down was attributed to several Fed officials sharing their views that rates may very well slow in December. But then bets were hedged, as they always are when awaiting other news, to see how the PPI data goes on Tuesday and, more importantly, to assess more Fed officials as they comment on rate hikes later this week and, of course, more data.  With all this hedging, volume was below average at 11.5 billion. 

Mon  November 14, 2022  4:34 PM

Wall Street ends lower as investors gauge Fed's policy path

By Lewis Krauskopf, Ankika Biswas and Amruta Khandekar

DJ: 33,747.86  +32.49        NAS: 11,323.33  +209.18       S&P: 3,992.93  +36.56     11/11

DJ: 33,536.70  -211.16       NAS: 11,196.22  -127.11         S&P: 3,957.25  -35.68      11/14

Nov 14 (Reuters) - Wall Street's main indexes ended lower on Monday, with real estate and discretionary sectors leading broad declines, as investors digested comments from U.S. Federal Reserve officials about plans for interest rate hikes and looked for next catalysts after last week's big stock market rally.  Losses accelerated toward the end of the up-and-down session, with focus turning to Tuesday's producer price index report and markets highly sensitive to inflation data.  Earlier on Monday, Fed Vice Chair Lael Brainard signaled that the central bank would will likely soon slow its interest rates hikes. Her comments somewhat buoyed sentiment for equities that had been dampened after Federal Reserve Gov. Christopher Waller on Sunday said the Fed may consider slowing the pace of increases at its next meeting but that should not be seen as a "softening" in its commitment to lower inflation.

A massive equity rally late last week was set off by a softer-than-expected inflation report that boosted investor hopes the Fed could dial back on its monetary tightening that has punished markets this year.  “There is still a sensitivity to Fed speak... One was a little hawkish, one was a little dovish,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.

The Dow Jones Industrial Average (.DJI) fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 (.SPX) lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite (.IXIC) dropped 127.11 points, or 1.12%, to 11,196.22.  The S&P 500 last week posted its biggest weekly percentage gain since late June, while the tech-heavy Nasdaq (.IXIC) notched its best week since March.

More Fed officials are due to speak later this week along with a slew of data, including on retail sales and housing, and earnings reports from major retailers.  "It just makes sense the market wants to pause and really both try to make sense of the trajectory (of Fed policy) and what the next drivers are going to be,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Among S&P 500 sectors, real estate (.SPLRCR) fell 2.7%, consumer discretionary (.SPLRCD) dropped 1.7% and financials (.SPSY) declined 1.5%.  In company news, Amazon (AMZN.O) shares fell 2.3% as The New York Times on Monday reported the company was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week.  Shares of Biogen Inc (BIIB.O) and Eli Lilly (LLY.N) gained 3.3% and 1.3%, respectively, after the failure of Swiss rival Roche's (ROG.S) Alzheimer's disease drug candidate.

Declining issues outnumbered advancing ones on the NYSE by a 2.23-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.  The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 72 new highs and 74 new lows.

About 11.5 billion shares changed hands in U.S. exchanges, compared with the 12.1 billion daily average over the last 20 sessions.