share this article!

The New York Stock Exchange is shown in the Manhattan borough of New York City, New York, United States, on April 16, 2021, amid the coronavirus illness (COVID-19) pandemic. Carlo Allegri/Reuters Reuters, NEW YORK, July 8 – In a broad sell-off fueled by concerns about the pace of the US economic recovery, Wall Street finished lower on Thursday, retreating from record closing highs. All three major U.S. stock indexes fell substantially as the bond market surged on a flight to safety, with economically sensitive transportation (.DJT) falling the most. “We’re still basically at all-time highs,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York, “so I wouldn’t read too much into today’s market behavior.” Pursche added, “The bond market is reflecting that the possibility of major inflation over a long period of time is very improbable, and that’s the worry that had been driving rates higher until the recent rise.” “We’re in a goldilocks scenario,” Pursche said, with enough growth to keep the economy afloat but not enough to cause the Fed to modify its policies. The minutes from the Federal Reserve’s most recent monetary policy meeting were released on Wednesday, revealing that the central bank does not feel the economy has fully recovered, but that a debate on tightening policy has begun in earnest. find out more The Dow Jones Industrial Average (.DJI) dropped 256.34 points, or 0.74 percent, to 34,425.45, the S&P 500 (.SPX) dropped 36.09 points, or 0.83 percent, to 4,322.04, and the Nasdaq Composite (.IXIC) sank 101.36 points, or 0.69 percent, to 14,563.71. Traders closed short bets in the bond market as they detected cracks in the US economic recovery. For the ninth day in a row, the yield on the benchmark 10-year US Treasury note decreased. Last week, the number of Americans filing first-time applications for unemployment benefits unexpectedly increased to 373,000, indicating that the labor market recovery in the United States is still bumpy. find out more The continuous crackdown by Beijing on U.S.-listed Chinese enterprises exacerbated the risk-averse mindset. China has widened its examination outside the IT sector after its first salvo against ride-hailing firm Didi Global Inc over the weekend. find out more Didi’s stock continued to fall, while Alibaba Group and Bidu Inc also finished the day down. The S&P 500’s 11 major sectors were all in the red, with financials (.SPSY) losing the most ground. Next week is the start of second-quarter reporting for the big banks. According to Refinitiv, analysts estimate aggregate year-over-year profits growth of 65.4 percent for companies in the S&P500 index, up from the 54 percent growth forecast given at the start of the quarter. “I’d like to see what profit growth looks like over two years rather than one,” Pursche said. “That would be a far better indicator of how good earnings will be.” “One-year data points coming out of the pandemic are so warped that they’re almost irrelevant.” Stephen Culp contributed reporting; Ambar Warrick and Devik Jain in Bengaluru contributed further reporting; and David Gregorio edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

share this article!