(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window)
Apple down after Morgan Stanley cuts Dec shipment target
Tesla falls on production loss worries
Indexes down: Dow 0.07%, S&P 0.25%, Nasdaq 0.5%
Dec 7 (Reuters) - Wall Street's main indexes struggled
for direction on Wednesday, bouncing around in choppy trading as
investors weighed potential recession fears linked to the pace
of the Federal Reserve's monetary policy tightening and its
effects on corporate America.
The benchmark S&P 500 fell for the fifth straight
session on Wednesday.
The Nasdaq was down for the fourth straight session,
dragged lower by a 1.3% drop in Apple Inc on Morgan
Stanley's iPhone shipment target cut and a 3.5% fall in Tesla
Inc over production loss worries.
Markets have also been rattled by downbeat comments from top
executives at Goldman Sachs Group Inc, JPMorgan Chase &
Co and Bank of America Corp on Tuesday that a
mild to more pronounced recession was likely ahead.
Fears that the U.S. central bank might stick to a longer
rate-hike cycle have intensified recently in the wake of strong
jobs and service-sector reports.
More economic data, including weekly jobless claims,
producer price index and the University of Michigan's consumer
sentiment survey this week, will be on the watch list for clues
on what to expect from the Fed on Dec. 14.
"When they (investors) take a look at what earnings
estimates are for the remainder of 2022 and for 2023, they have
not considered a recession in 2023," said Paul Nolte, portfolio
manager at Kingsview Asset Management in Chicago.
"There's some adjustment to what earnings estimates will be
over the next 12 months and I think that's what's providing a
little bit of pressure to the markets."
The CBOE volatility index, also known as Wall
Street's fear gauge, rose to a two-week high before slipping
Money market participants see a 91% chance that the Fed will
increase its key benchmark rate by 50 basis points in December
to 4.25%-4.50%, with rates peaking in May 2023 at 4.93%.
By 2:21 p.m. ET (1921 GMT), the Dow Jones Industrial Average
fell 23.81 points, or 0.07%, to 33,572.53, the S&P 500
lost 9.85 points, or 0.25%, to 3,931.41 and the Nasdaq
Composite dropped 54.80 points, or 0.5%, to 10,960.09.
Concerns about a steep rise in borrowing costs have boosted
the dollar, but dented demand for risk assets such as equities
this year. The S&P 500 is on track to snap a three-year winning
streak, down 17.5% so far in 2022.
Four out of 11 major S&P sector indexes were higher, with
healthcare shares leading the pack, while technology
and communication services stocks were among
the worst performers.
Energy fell 0.6% and was on course for its fifth
straight decline. The sector's performance was weighed by U.S.
crude prices falling again, at one point trading at its
lowest intraday level since late December 2021.
Carvana Co was down 40.1% after Wedbush downgraded
the used-car retailer's stock to "underperform" from "neutral"
and slashed its price target to $1.
Meanwhile, United Airlines traded 2.5% lower. Unions
representing various workers at the airline said they would join
forces on contract negotiations.
Travel-related stocks were generally down. Delta Air Lines
and American Airlines Group were 3% and 4.1%
lower respectively, with cruise line operators Carnival Corp
and Norwegian Cruise Line Holdings and
accommodation-linked Airbnb Inc and Booking Holdings
all falling between 1.5% and 3.7%.
(Reporting by Shubham Batra, Ankika Biswas, Johann M Cherian
and Shashwat Chauhan in Bengaluru and David French in New York;
Editing by Vinay Dwivedi, Shounak Dasgupta and Lisa Shumaker)