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US STOCKS-Wall St tumbles after Powell urges caution on rate cuts
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US STOCKS-Wall St tumbles after Powell urges caution on rate cuts
Nov 15, 2024 11:15 AM

(For a Reuters live blog on U.S., UK and European stock

markets, click or type LIVE/ in a news window.)

*

Retail sales rise 0.4% in October, above forecasts

*

Indexes on track for weekly losses

*

Vaccine makers, packaged food cos fall after RFK Jr.

appointment

*

Applied Materials ( AMAT ) down after forecasting Q1 revenue below

estimates

*

Indexes down: Dow 0.72%, S&P 500 1.23%, Nasdaq 2.03%

(Updated at 11:50 a.m. ET/1650 GMT)

By Lisa Pauline Mattackal and Purvi Agarwal

Nov 15 (Reuters) -

The Nasdaq and the S&P 500 were set for their worst session

in over two weeks on Friday, after comments from Federal Reserve

Chair Jerome Powell pointed to a slower pace of interest-rate

cuts.

Powell on Thursday pointed to ongoing economic growth, a

solid job market, and inflation above the Fed's 2% target as

reasons the central bank can afford to be careful with the pace

and scope of future rate cuts.

Traders increased bets the Fed will keep rates on hold

at its December meeting, pricing in a 38% chance, compared with

14% a month ago, according to the CME FedWatch tool. They also

dialed back expectations for easing in 2025.

That view was reinforced by economic data on Friday

showing U.S. retail sales increased slightly more than expected

in October, pointing to further economic strength, while import

prices rebounded.

Rate-sensitive megacaps fell as Treasury yields rose,

with Nvidia ( NVDA ) and Amazon.com ( AMZN ) down more than 3%

each, while the information technology index dropped

2.3%.

All three major U.S. stock indexes were headed for

weekly losses - the Dow 1.2%, the Nasdaq 2.9% and the S&P 500 2%

- as market focus shifted from the presidential election to the

state of the economy and potential inflation risks under a new

administration.

"We can chalk the defensive tone on the market to several

factors ... valuations and positioning after the outsized

post-election rally last week, the speed that we've seen bond

yields go back up ... (and) to what extent the Fed is going to

be able to cut into next year," said Timothy Chubb, chief

investment officer at Girard, a Univest Wealth Division.

Stocks of vaccine makers and packaged food companies dipped

after President-elect Donald Trump selected Robert F Kennedy Jr,

who has spread misinformation on vaccines and criticized

ultra-processed foods, to head the Department of Health and

Human Services.

PepsiCo ( PEP ) lost 4%. Moderna ( MRNA ) slumped 8% and

Pfizer ( PFE ) lost 4.5%, while the healthcare sector

dropped 1.8% to its lowest since May.

"The uncertainty over the political process is now over

... but the policy uncertainty is robust," said Lauren Goodwin,

economist and chief market strategist at New York Life

Investments.

The Dow Jones Industrial Average fell 314.89 points,

or 0.72%, to 43,435.97, the S&P 500 lost 73.22 points, or

1.23%, to 5,875.95, and the Nasdaq Composite lost 387.20

points, or 2.03%, to 18,720.45.

The small-cap Russell 2000 index was down 1%,

heading for its fourth consecutive session of declines and its

worst week in over two months.

The Philadelphia SE Semiconductor index lost 3%,

bogged down by a 8.7% decline in Applied Materials ( AMAT )

after it forecast first-quarter revenue below Wall Street

estimates.

Declining issues outnumbered advancers by a 1.93-to-1 ratio

on the NYSE and by a 2.56-to-1 ratio on the Nasdaq.

The S&P 500 posted 9 new 52-week highs and 24 new lows while

the Nasdaq Composite recorded 26 new highs and 218 new lows.

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