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Meta falls on report of EU concern over targeted ads
Energy stocks drop as crude trades at lowest level since
Mirati slumps after trial data disappoints
Dec 6 (Reuters) - Wall Street closed lower on Tuesday,
with the S&P 500 declining for the fourth straight session, as
skittish investors fretted over Federal Reserve rate hikes and
further talk of a looming recession.
Among the biggest drags on the S&P was Meta Platforms Inc
, which slid following reports that European Union
regulators have ruled the company should not require users to
agree to personalized ads based on their digital activity.
However, technology names generally suffered as investors
applied caution toward high-growth companies whose performance
would be sluggish in a challenging economy. This hit Apple Inc
, Amazon.com Inc and Alphabet Inc and
sent the tech-heavy Nasdaq down for a third straight session.
Most of the 11 major S&P sectors were lower, with energy and
communications services joining technology
as leading laggards. Utilities, a defensive sector
often preferred during times of economic uncertainty, fared
Future economic growth prospects were in focus on Tuesday
following comments from financial titans pointing toward
uncertain times ahead.
Bank of America Corp's chief executive predicted
three quarters of mild negative growth next year, while JPMorgan
Chase and Co's CEO Jamie Dimon said inflation will erode
consumer spending power and that a mild to more pronounced
recession was likely ahead.
Their comments came on the heels of recent views from
BlackRock and others that believe the U.S. Federal Reserve's
aggressive monetary tightening to combat stubbornly high price
rises could induce an economic downturn in 2023.
"The market is very reactive right now," said David Sadkin,
president at Bel Air Investment Advisors.
He noted that, while markets traditionally reflect the
future, right now they are moving up and down based on the
Fears about economic growth come amid a re-evaluation by
traders of what path future interest rate hikes will take,
following strong data on jobs and the services sector in recent
Money market bets are pointing to a 91% chance that the U.S.
central bank might raise rates by 50 basis points at its Dec.
13-14 policy meeting, with rates expected to peak at 4.98% in
May 2023, up from 4.92% estimated on Monday before
service-sector data was released.
The S&P 500 rallied 13.8% in October and November on hopes
of smaller rate hikes and better-than-expected earnings,
although the expectation for slower rate hikes could be
undermined by further data releases, including producer prices
due out on Friday.
"The market got ahead of itself at the end of November, but
then we got some good economic data, so people are re-evaluating
what the Fed is going to do next week," said Bel Air's Sadkin.
According to preliminary data, the S&P 500 lost 57.05
points, or 1.43%, to end at 3,941.79 points, while the Nasdaq
Composite lost 225.01 points, or 1.99%, to 11,014.93.
The Dow Jones Industrial Average fell 347.49 points, or
1.02%, to 33,599.61.
Jitters on the direction of global growth have also weighed
on oil prices, with U.S. crude slipping to levels last
seen in January, before Russia's invasion of Ukraine disrupted
supply markets. The energy sector fell on Tuesday.
Banks are among the most sensitive stocks to an economic
downturn, as they potentially face negative effects from bad
loans or slowing loan growth. The S&P banks index was
down, with Bank of America a leading decliner.
Elsewhere, Mirati Therapeutics Inc slumped after
the company reported disappointing early trial data on its
experimental cancer drug adagrasib.
Textron Inc climbed after the U.S. Army awarded the
contract for its next-generation helicopter to the company's
(Reporting by Devik Jain, Ankika Biswas and Johann M Cherian in
Bengaluru and David French in New York; Editing by Vinay
Dwivedi, Shounak Dasgupta and Lisa Shumaker)