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* U.S. manufacturing activity slows more than expected in
* Kohl's tumbles after calling off sale to Franchise Group
* Micron's downbeat forecast fuels selloff in chip sector
* Indexes down: Dow 0.40%, S&P 0.38%, Nasdaq 0.51%
July 1 (Reuters) - Wall Street started the second half of
the year on a dull note on Friday as investors worried over the
risks to economic growth from the Federal Reserve's resolve to
curb rising prices at all costs.
As the U.S. central bank moves away from easy money by
raising borrowing costs, investors for much of the year have
been selling equities, pushing the benchmark S&P 500 to close
out its worst first six months since 1970 on Thursday.
"People are hoping we have a better second half but the
proof is going to be in the numbers and the first thing they are
going to look for is how bad are earnings going to be," said Joe
Saluzzi, co-manager of trading at Themis Trading.
There was more evidence on Friday that rising interest rates
was hurting demand in the world's largest economy. Data showed a
measure of new orders shrank for the first time in two years and
manufacturing activity slowed more than expected in June.
Despite signs of slowing growth, Fed policymakers have been
making a case for a second 75-basis points interest rate hike in
July, leaving investors to worry about the potential hit to
company profits in the upcoming quarterly reporting season.
"The real question on investors' minds is if we're getting
slower economic data, will that necessarily translate to some of
the Q2 earnings reports?" said Chad Oviatt, director of
investment management at Huntington Private Bank.
Markets saw a turbulent first-half as fears over big
interest rate hikes, geopolitical uncertainty, prolonged
supply-chain snarls and lockdowns in China weighed on sentiment.
In the previous session, all three indexes posted their
second straight quarterly declines. The Dow suffered its
biggest first-half percentage plunge since 1962 and the
tech-heavy Nasdaq recorded its worst-ever first six
Shares of market leaders such as Amazon.com Inc and
Tesla Inc, edged higher on Friday, providing the
biggest boost to the S&P 500 and the Nasdaq.
At 12:09 p.m. ET, the Dow Jones Industrial Average
was down 124.63 points, or 0.40%, at 30,650.80, the S&P 500
was down 14.30 points, or 0.38%, at 3,771.08, and the
Nasdaq Composite was down 56.61 points, or 0.51%, at
Trading volume is likely to be light heading into a long
weekend with markets closed on Monday for July 4 holiday.
Micron Technology Inc dropped 5.5% as the memory-chip
firm predicted quarterly revenue below market expectations,
triggering concerns the chip sector was turning toward a down
The broader Philadelphia SE Semiconductor index fell
Facebook-owner Meta Platforms Inc slipped 3.2%. The
company has cut plans to hire engineers by at least 30% this
year, CEO Mark Zuckerberg told employees, warning them to brace
for a deep economic downturn.
Kohl's Corp tumbled 20.2% as the department store
chain called off its sale to Vitamin Shoppe-owner Franchise
Advancing issues outnumbered decliners by a 1.02-to-1 ratio
on the NYSE. Declining issues outnumbered advancers for a
1.13-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 48 new
lows, while the Nasdaq recorded eight new highs and 183 new
(Reporting by Amruta Khandekar and Sruthi Shankar in Bengaluru;
Editing by Arun Koyyur)